Why Career Promiscuity Is Important in Silicon Valley
As i wrote before, the average job tenure in Silicon Valley is about 2 years. Normally that could be argued is a bad thing. But on the positive side, this is the reason that we have so many amazing & successful companies. This talent ends up bringing and sharing new best practices, networks and expertise to the next generation of blooming startups. We see the widespread distribution of expertise and learning across an entire ecosystem.
I believe that this is one of the reasons that Boston as an ecosystem during the 70s & 80s fell VERY far behind Silicon Valley despite being neck and neck when it came to talent, great tech companies (Wang, DEC), elite higher education institutes like MIT & Harvard among others. Massachusetts enforced non-compete contracts, while California did not. Hence this led to a flowering of the tech industry here in the San Francisco Bay Area where talent moved from company to company to company. Almost like Bees buzzing around spreading their pollen.
One example would be B2B Sales, Best practices from one of the giants like Oracle, were adopted by Salesforce. Salesforce refugees then fled to the next generation of B2B Giants and re-deployed & iterated on playbooks and best practices.
I can attest that Facebook and Google are full of ex-Yahoo! Engineers, Sales & Marketing people. Airbnb & Uber are full of ex-Googlers and Facebook people. And now we have seen more of these folks spawning out into new fast growing companies. I anticipate there will be some amazing companies coming out of Coinbase alumni. We even see this in Venture Capital as talent spins out of established VC funds to start their own new investment firm. It’s like a continuous Cambrian explosion of learning, new playbooks and talent development.
This is why clusters are important for any industry. You need this mixing. And this is why I continue to be bullish on Silicon Valley in the near 5-10 year horizon.
Marvin’s Best Weekly Reads September 13th, 2020
“Unless there is opposing wind, a kite cannot rise.”--Chinese saying
This is very much worth reading if you are a SaaS founder looking to scale your business. Lots of good frameworks for thinking thru growth.
The key misconception of B2B SaaS growth
This is absolutely fascinating. Love these profiles.
"The ASO is incredibly secretive about its finances. But over the years, researchers and French journalists have managed to piece together bits of data from public filings.
Sources The Hustle spoke with estimate the Tour’s revenue to be somewhere between $60m and $150m per year — about 50% of the ASO’s total annual income. Based on historical revenue data, the ASO has ~21% profit margin. So, a very rough estimate would be that the organization enjoys a $12m to $30m annual profit from the race.
“The Tour de France exists to make money,” says Jean-François Mignot, a demographer who has studied the economics of cycling. “It’s a commercial race, and it’s owned by people whose main goal is to make money off of it.”
But the organizer is only one moving part of the Tour de France: a second thriving economy has been built around the teams and riders who compete there."
The economics of the Tour de France
I like this term. Micropolitan work from home towns. Lots of cool towns listed here.
Keep calm, make sure you go out and vote. (have a plan B & watch how things develop.)
"But I think she — like a lot of other white, Gen X native-born Americans who’ve known mostly domestic peace and stability — is being entirely too blasé about the approaching storm.
As an immigrant who escaped to America from apartheid-era South Africa, I feel that I’ve cultivated a sharper appreciation for political trouble. To me, the signs on the American horizon are flashing blood red.
Armed political skirmishes are erupting on the streets, and scholars are tracking a rise in violence and instability as the election draws near. Gun sales keep shattering records. Mercifully, I suppose, there’s a nationwide shortage of ammo. Then there is the pandemic, mass unemployment, natural disasters on every coast, intense racial and partisan polarization, and not a little bit of lockdown-induced collective stir craziness."
https://www.nytimes.com/2020/09/03/opinion/im-doomsday-prepping-for-the-end-of-democracy.html
This shows how broken the housing market is in many big US Metropolitan areas. Also what a strange & sad story of real estate grifters.
"One reading of Brooks-Church and Gendville’s faltering empire is a tale of a couple who simply got in over their heads. From what Miller, the appraiser, can surmise, the math stopped working “well before COVID,” given the double whammy of falling retail sales and rising commercial rents. “They can’t keep it going without selling some of the assets,” he says. “They’re running into roadblocks of their own making.”
Another way to look at their downward spiral is as a parable of a housing market that is not primarily intended, or even incentivized, to actually house people. Brooklyn’s runaway success, it turns out, was built on an economic disparity so intense that it has created a microgeneration of gentrifiers like Brooks-Church and Gendville who are now being priced out themselves."
https://www.thecut.com/2020/08/1214-dean-street-brooklyn-landlords.html
Go Optimism!
https://seths.blog/2020/09/optimism-as-a-choice/
This is an excellent framework for thinking about marketing. From the master.
https://rishad.substack.com/p/strategy-frames-light-and-time
"Unlike other middlemen like Instacart and Uber Eats, GoPuff acts more like a retailer, buying directly from giants like Anheuser-Busch, PepsiCo and Unilever. It generates revenue not so much from the nominal delivery fee, but from slapping a hefty markup on the stuff and, increasingly, selling better placement on its app.
Business has been booming since the pandemic hit. Sales reached an estimated $250 million in 2019, and orders are up 400% this year, but it is not profitable and admits it’s still not making money on a fourth of its centers."
It is not a new idea—and not necessarily a good one. Essentially the same model (with the exact same financial backer: SoftBank) was tried out in the first dot-com bubble.
Turns out super-fast delivery of low-cost groceries is a very tough way to make a buck. GoPuff says it is different because of its $2 delivery fee (Kozmo was free) and $10 minimum (Kozmo had none). It also benefits from focusing on physical clusters of customers, which pre-Covid largely meant college kids on campuses."
This is a brilliant analogy. Coffee and Consultants. Worth a read.
"At the risk of over-simplifying this, for both coffee and consulting you could say:
First wave is the Silent Generation with a cronyist ethos and no taste.
Second wave is Boomers with a flashy charisma ethos, some taste, and a lot of stagecraft.
Third wave is Gen X with a retreating/self-effacing nerd ethos and skeptical but deeply held tastes. It’s obviously the best wave.
Fourth wave is Millennials with an ironic/kayfabe ethos and cynically performative tastes.
This shouldn’t be too surprising. Both coffee and consulting are products for minds. Psychoactive products that link to producer and consumer personalities. You should expect to see echoes of generational personalities. Both are also mid-career markets. Your coffee tastes settle down around when you settle down into an adult career."
https://artofgig.substack.com/p/fourth-wave-consulting
"Both journalists and venture capitalists struggle with mainly the same end decision; is the story worth publishing and is the story worth investing in. Approaching the issue from the notions of news judgement and investment decision, the two professions have striking resemblances when it comes to both upstream and downstream processes. Journalists rely on newsflow while venture capitalists depend on dealflow. The quality of it is key."
Love these kinds of unknown giant businesses. Great for Croatia and the region too. Profitable too!
"Infobip is one of those big companies that no one has heard of but everyone has used. If you’ve ever received a message from your bank, or from Facebook or Uber, you’ve used Infobip. The Croatian company provides the messaging platform for some 750 banks, and works with some 650 mobile operators around the world.
Silvio Kutic, founder and chief executive, estimates that some 5bn people, or ⅔ of the world’s population have used the Infobip service, which is still run from Kutic’s tiny home town of Vodnjan, on Croatia’s Istrian coast."
https://sifted.eu/articles/infobip-unicorn-ipo/
"Like money, status is about scarcity. It is an abstract but absolute representation of what you have. It is zero-sum, and backed by something tangible. Status is a flex.
Also like money, status is about reputation. It’s about trust, generosity, and about what you’ve given away, not what you have. It can be originated into existence, or destroyed. It isn’t like a gold coin here; it’s more like an IOU. It’s an adaptation to abundance, not to scarcity.
Status is both of those things. It’s a unit of what you have, and it’s also a unit of what you’re owed."
https://danco.substack.com/p/scarcity-status-versus-abundance
A great rags to riches story. The original Tyler Perry.
"The 51-year-old entertainer owns the entirety of his creative output, including more than 1,200 episodes of television, 22 feature films and at least two dozen stage plays, as well as a 330-acre studio lot at the edge of Atlanta’s southern limits. He used that control to leverage a deal with ViacomCBS that pays him $150 million a year for new content and gives him an equity stake in BET+, the streaming service it debuted last September.
Forbes estimates Perry has earned more than $1.4 billion in pretax income since 2005, which he used to buy homes in Atlanta, New York, Los Angeles and Jackson Hole, Wyoming, as well as two planes. Quite a lifestyle for a once-homeless playwright raised in poverty in New Orleans. Today, Forbes estimates his net worth at $1 billion, with a clear path to future membership in The Forbes 400."
“I love when people say you come from ‘humble beginnings,’ ” he says. “[It] means you were poor as hell.” It also makes success sweeter. “Ownership,” he adds, “changes everything.”
One of the most prescient books (and favorite ones too), "The Sovereign Individual", this world is starting to come to fruition 2 decades later.
"The basic thesis of the book is that technology, particularly the internet, will lead to unbundling & modularizing of government.
Put simply: We'll transition from being a "citizen" of government to a "customer" of government, where governments compete to earn our business."
https://eriktorenberg.substack.com/p/the-sovereign-individual-investment
"Zoom is the Napster of the event industry, the ease with which you can put on good-enough virtual events with a global audience, almost for free, much to the undercutting of the underlying economics of the physical events world. All types of business event — conferences, trade shows, conventions — are in danger of their revenues streams of tickets, sponsorships, memberships, and other types of fees being eroded as the world gets used to digital formats and alternatives emerge to physical networking, matchmaking and other tasks we get out of these events.
Billions of dollars have been sucked out of the industry this year as it is completely shut, and virtual is making up only a tiny fraction of that."
https://skift.com/2020/08/26/the-event-industry-is-being-confronted-by-its-napster-moment/
"We agree with much of the investing world. It’s hard to build conviction in most things, and these tech platforms offer an oasis of certainty. But buying their shares sounds expensive, and it’s a hard way to differentiate."
"Rather than own FB shares, we’d rather own Instagram accounts. Rather than owning Amazon stock, we’d rather own a bunch of third-party selling merchants. And rather than owning Google stock, we’d rather own YouTube libraries.
Why? Because all the tailwinds that make those stocks interesting to own are, in part, shared by the commercial actors on their platforms. And yet capital markets largely haven’t flowed into those spaces yet."
https://medium.com/@alibhamed/platform-economies-65d6714ca768
I like this new version of Wartime vs. Peacetime leadership. That analogy was not always the most appropriate for business. Routine Check vs. Emergency Room CEO.
"The “wartime” analogy gives people in power an excuse for poor behavior which is separate from making tough decisions quickly. You don’t need to look past the White House and other world governments to see how behavior and decision making can be conflated. Furthermore, many tech CEOs have not fought for our country. They have fought many many other battles and wars, but not the type that involves the military.
Also, the military has traditionally been exclusively for men (Mulan!), so I wanted to remedy that. [b] Finally, war implies a zero sum result (a winner and loser), but in times like a pandemic, the end result is not necessarily zero sum. In fact if one loses, we all lose."
https://foundermusings.substack.com/p/war-and-peace
"Since 2017, the San Francisco–based company has invested in more than 15 startups. It tends to take early-stage stakes of about 10% in startups that are led by its former employees or represent a facet of the financial technology sector, say investors who have worked with Stripe on deals.
Leveraging its success as a private company and the reputation of its founders Patrick and John Collison, Stripe has won deals, sometimes by outbidding traditional VC firms. That’s helped it emerge as a growing force in corporate venture capital, just as Google and Salesforce did in years past.
“There’s a halo effect around Stripe” because of its valuation and engineering reputation, said Ross Rich, who spent four years at the company before he co-founded Accord, which makes collaborative software for sales representatives. Stripe led its seed financing earlier this year after a competitive fundraising process."
https://www.theinformation.com/articles/venture-capitalists-newest-threat-stripe
"The lesson here for startups is that the imperative is to achieve a drumbeat of regular and repeated product-market fits, because PMF isn’t a single note you hit and then move on. It’s an ever-evolving rhythm of problems and desires and whims that you have to constantly play to, like great jazz."
This really spoke to me and I think it is timely for all of us right now.
"We’ve all been thrown off our track, to varying degrees. Some, more cruelly than others. It’s easy to assume we can just find the track again on the other side of this, if there is another side. But in listening to Boyd over and over in August, I have a slightly different view. I think most of us will need to work really hard to rediscover the track.
It may take years, in fact. It will require a significant amount of scenario planning, letting go of beliefs once strongly-held and/or accepted as immutable truths, a survivalists’ adaptability, and the willingness to be nimble and accept new environmental signals that may force us to make decisions we couldn’t have dreamed of just a few months ago.
That’s why I find Boyd’s metaphor so powerful. This year will force me to be even more alert, move alive, more aware of the signals around me. By paying close attention, there’s a possibility to find the track again. It won’t just reappear, like someone flipping the switch back. Rather, I believe it is a new track, and it has to be forged from scratch."
https://semilshah.com/2020/09/06/finding-the-track/
This is an excellent framework and idea for startup founders working on alignment of their team.
https://davidcummings.org/2020/08/29/startup-state-of-the-union-slide-deck
"The general population does not have internal motivation. They are more interested in being entertained and “chilling” with other people who won’t go anywhere. Therefore, they always want the short cut and they want it sold in an exciting manner.
If you attempt to sell with logic and without emotion, the losses you incur will force you to quickly realize the above. Short cuts and hype are significantly better sales tools compared to logical things such as more effort = more rewards. Make everything appear to be more entertaining vs. educational, hence why movies are more popular than books. So on and so forth.
If it sounds long/difficult like anything meaningful in life, you’ve done a terrible job with your pitch."
https://wallstreetplayboys.com/ignore-what-people-say-focus-on-what-they-do-specific-examples/
"And so with no good answers from authorities who should offer them, we have entered a golden age for anecdata about the state of the U.S. economy that I think is teetering on the edge of full-out denialism about the recession, the recovery, and how lawmakers and other officials ought to proceed with what happens next. And we’ve reached this moment believing what we see instead of what a sum of the economy’s parts tell us. We are in this position not because of economic data but in spite of it.
Because what the data really tell us is we shouldn’t believe our lying eyes. We shouldn’t trust that it looks like things are reopening with vigor, that the world appears to be. getting back to “normal,” that this crisis seems to have turned out to be temporary.
The economy is operating so far below capacity that we can’t help but make excuses for how “normal” things around us might seem."
https://mylesudland.substack.com/p/can-we-trust-our-lying-eyes
"Hu is part of a rising class of creators in China who are racing to get in on live-stream shopping, an emerging form of retail that has grown into an industry worth an estimated $66 billion. Although the trend has been part of Chinese internet culture for years, analysts say the coronavirus pandemic has made it mainstream.
Even the Chinese government has voiced its support, calling the industry the "new engine" of e-commerce growth and encouraging live-streaming as a solution to unemployment, which has risen sharply in China due to the pandemic.
Live-stream shopping is a blend of entertainment and e-commerce. Viewers buy goods online from people who show off their latest finds — from lipsticks to laundry detergent — in real-time videos. Many liken the concept to TV shopping channel QVC, but the Chinese model is distinctly more modern, mobile and interactive. Hosts can give their fans discount coupons and flash deals in real time, while viewers can click to send their favorite stars virtual "gifts."
I think this is a really smart move altho Tai Lopez has a mixed reputation.
"Tai Lopez — whose Web site hawks wisdom for Web entrepreneurs on “traffic mastery” and “Instagram hacks” — has launched a new company, Retail Ecommerce Ventures, that’s shelling out tens of millions of dollars for a growing assortment of down-and-out retail brands. And he’s been keen to broadcast REV’s deals to his more than 10 million social-media followers.
Lopez’s business partner is Alex Mehr, a 40-year-old, ex-NASA scientist who co-founded Zoosk, a dating site that sold for $298 million last year. Together, they’re buying the intellectual property of some of the highest-profile victims of the carnage that has engulfed the retail industry.
In addition to Dressbarn in November, Pier 1 in July and Modell’s in August, the duo’s Miami-based firm acquired Linens ’N Things and the Franklin Mint in June from Sequential Brands Group for an undisclosed price. Another three are in the pipeline, Lopez says, declining to identify them.
Their big bet: That these retail names have the potential to become cash cows online, even if the thousands of stores they used to operate are getting shuttered."
Josh Kopelman knows. In this day and age, it's the brand of the firm and the brand of the individual investor.
"When First Round was first getting started, there were so few seed funds that it was like walking into a Footlocker and seeing just three sneakers on the shelf. A founder could try on all three and kind of see which fit, then pick. But today, when you walk into that shoe store and you see 1,000 shoes on the shelf, it’s really hard to know where to go first.
And we believe that the brands that have proven their ability to create winners before really matter. Just like Nike is defined by the entrepreneurs who have benefited from its product, I think brand actually matters more now than ever before."
Yup! The absolutist policies make no sense as well as the lack of rational guidance from anyone in government right now in the USA. Basically down to the individual now to manage this.
"When we talk about outdoor risk of transmission versus indoor, we’re talking about like 20 times difference with indoor risk being 20 times higher. So it’s just a huge prevention opportunity.
And, as you said, we are not going to stop interacting as human beings. So let’s find ways to keep our contacts at a minimum and keep them outdoors. If we work with that framework, I think there’s a lot we can do. That is more sustainable than the approach we’re currently taking, which is fragmented and unproductive."
https://www.vox.com/2020/9/10/21430547/covid-19-julia-marcus-the-ezra-klein-show-outside-inside-risk
A successful bet gone bad. And now America & the world is paying for it.
"Although Thiel has been moving away from Trump for years now, his write-down on a presidential investment during an election year is due in part to the administration’s disastrous response to the coronavirus. As the economy tanked and millions got sick, Thiel became furious, as first reported by the Daily Beast. Two people close to Thiel have confirmed that the pandemic was a breaking point for the technocrat, who once hoped electing a political outsider would disrupt bureaucracy and bring about radical change and innovation in government."
https://www.buzzfeednews.com/article/rosiegray/peter-thiel-donald-trump-white-nationalist-support
When Revolutionary meets Revolution. This is awesome. Anthony "Pomp" Pompliano
"We are living through a time of great transition. These trends will lead to the creation of a new type of investor — the solo-capitalist.
These trends include:
A transition away from institutions
Increased need for individual identity
Decreased friction for audience building
Greater focus on a decentralized investor base
Increasing desire for removal of communication middlemen
A rise in solo-capitalist tools & platforms
My goal is to be at the tip of the spear of this transition to the era of solo-capitalists."
https://pomp.substack.com/p/im-launching-a-new-fund
"The teenage economy of cool is a savage yet intricately structured marketplace where humans have to work out how to survive in an open tribal landscape. There’s a reason so much YA fiction is dystopic and horrifying like The Hunger Games or The Maze Runner.
Why is it that cool is so often associated with teenagers?
I suspect it’s because teens live at a very particular juncture in life. They’re old enough to be conscious of the dynamics of cool and social status, their tastes are developed enough to have a more refined quality filter on things like music and fashion and other consumer products, but they’re not so old that their tastes have ossified or that they’ve become captive to years of conditioning from the advanced marketing apparatus of capitalism or the sophisticated social conformity pressures of adult society.
So we ascribe a more intuitive valence to their judgements of what is cool, what is not."
“This more agile understanding of the digital economy helps explain why Gen Z is so much more prone to Internet entrepreneurship. Instagram, YouTube, and TikTok are incredible tools for broadcast – and for building a business around that broadcast content. When it comes to messaging friends and expressing themselves, they’ll go to Snapchat, iMessage, Discord, and Instagram DMs.”
I hate this show but it is impressive how they leveraged the crap out of it as a business platform. We can all learn something from them regardless.
"The show allowed the family to establish themselves not just as celebrities but as characters with storylines that the media and fans hungrily devoured. They were able to then leverage this attention into billion-dollar businesses, the success of which was driven by the public’s sense of connection to them, of knowing them. The show was their secret weapon — a tool for promotion and personification, providing personal narratives and depth that influencers and even Hollywood A-listers could never achieve."
"It could be argued that the Kardashians no longer need KUWTK. After all, they have already leveraged stratospheric fame and wealth into lucrative businesses. Kim’s and Kylie’s cosmetics companies are currently valued at $1 billion and $900 million, respectively; Khloé’s clothing brand had one of the most successful launches in history; even Kourtney — the least enthralled by life in the public eye — recently launched a lifestyle website."
How The Kardashians Spent Years Destroying The Show At The Center Of Their Empire
Impressive group of investors, founders with grit & awesome product. Valuation seems really out of whack to me. WTF do I know?
"Roam Research, which has raised $9 million at a valuation of $200 million, or about 25 times higher than the median valuation for seed rounds.
Roam is tapping more than a dozen individuals and firms for the round, including Stripe co-founders Patrick and John Collison, True Ventures and Lux Capital.
"Other investors participating in Roam's seed funding include Coinbase's former Chief Technology Officer Balaji Srinivasan, Uber investor Tim Ferriss, Accomplice VC partners Sarah Downey & Jeff Fagnan, & individual investors Nikhil Basu-Trivedi, Josh Buckley, Brianne Kimmel & Harry Stebbings.
Excitement about this new crop of note-taking apps echoes the fanfare that rose around Evernote in its early years—& then largely evaporated.
It reached a valuation of more than $1 billion, boosted by a who’s who of Silicon Valley investors. Users topped 200 million. But its outlook dimmed as people turned to other free, cloud-based services, & Evernote went through rounds of layoffs. An expected initial public offering failed to materialize."
This one really spoke to me. 2020 has been tough on all of us.
"Surge capacity is a collection of adaptive systems — mental and physical — that humans draw on for short-term survival in acutely stressful situations, such as natural disasters. Pandemics are different — the disaster itself stretches out indefinitely.
“The pandemic has demonstrated both what we can do with surge capacity and the limits of surge capacity,” says Masten. When it’s depleted, it has to be renewed. But what happens when you struggle to renew it because the emergency phase has now become chronic?"
“I think we maybe underestimate how severe the adversity is and that people may be experiencing a normal reaction to a pretty severe and ongoing, unfolding, cascading disaster,” Masten says. “It’s important to recognize that it’s normal in a situation of great uncertainty and chronic stress to get exhausted and to feel ups and downs, to feel like you’re depleted or experience periods of burnout.”
“It’s harder for high achievers,” she says. “The more accustomed you are to solving problems, to getting things done, to having a routine, the harder it will be on you because none of that is possible right now. You get feelings of hopelessness and helplessness, and those aren’t good.”
https://elemental.medium.com/your-surge-capacity-is-depleted-it-s-why-you-feel-awful-de285d542f4c
Business Development (BD) & Partnerships Make NO sense for most Seed Stage Startups
I find this happens often for founders. They push for a partnership with a large distribution partner too early. The thinking goes like this.
“We have an awesome product and it’s so hard to get in front of customers. Plus I am not a sales expert. So we will just partner with XYZ BIG awesome company who have these customers and they help us sell it or use their channel to do it. Problem solved.”
On paper this seems like it makes a lot of sense. But I think it is a mistake. There are so many unknowns you need to figure out. Adding in a larger partner who may have different priorities adds complexity when you should be looking at some basic things first.
Oftentimes, your product is usually not awesome yet. We are talking seed stage here (ie. pre-Series A) where things are still half baked. There are most likely many issues and bugs. Something an established BD Partner will just not be able to tolerate or be willing to risk distributing to their valuable customer base.
I am a fan of BD/Partnerships for startups but only after they have figured out their own customer segments, have confirmed it by selling themselves and closing a bunch of deals. You need to have a clearer view on positioning: the story and value proposition and sales cycles. And you also need a decent sample set (10-50 customers yourself) and good basic sales process in place. This is the foundation to make BD work for you and you cannot short cut this.
Then and only then, does it make sense to think about and explore BD Partnership. Once you go down that path, you have to ensure you have the right people managing the partnership, educating the channel partners sales team, helping them craft messaging & marketing (that hopefully you will have from your own foundational work). You also need to think about how to manage commissions/revenue splits and track them.
You also need to have people on the team ready to jump in ready to fix stuff when something breaks on product, process or whatever side. Basic account management, otherwise known as channel management. If you do not do this, the BD/Partnership with XYZ Big company will not work because they will not trust that you help in future. Selling someone else’s product/service is always harder and commissions also do not always align to make it work.
So the point is you gotta sell this yourself, then build a team around yourself to sell it successfully. Then and only then, do you earn the right to engage in the BD/Partnerships route. And also more likely to make it work.
Turning of the Corkscrew: from Burn to Bust
From “Startups” to “End Ups”. I recently heard a talk about the cycle of life of companies here in Silicon Valley. It’s a good perspective of the different stages and evolution of a company.
In the beginning, you go from the stage of trying to reduce “Burn” rate. So everyone you hire is irreplaceable. In this stage you need people who are iconic, unique and who take the initiative and just get S--t done whatever it takes. Sometimes it is ugly but they get the job done.
But as you become more successful and scale, the goal of the company shifts to trying to reduce the odds of going bust. Hence the “Bust” stage. You need to make sure you have processes, add in code ie. automation, make sure everyone on your team is replaceable. Basically standardization (or some people prefer to call it bureaucratization) by making sure people fit in their box and do not deviate from the processes that make the business work.
That is why you see so much churn of staff as companies grow. And this churn and continual move to critical mass in new companies and industries is what keeps Silicon Valley so competitive & interesting. Knowledge and best practices spread all over. Almost like bees flying around and pollinating their spores around.
So an older example, would be the folks who left Fairchild Semiconductor and started Intel. Or how refugees from Ebay seeded many of the future massive marketplaces and ecommerce businesses. Or how many ex-Yahoo! People seeded Google, Facebook and many present digital media and adtech giants. More recently you see how many ex-Facebook employees have ended up in the world of Crypto.
At present times, I’m super excited to see where top people from Airbnb, Square or Coinbase end up.And the new awesome startups and ideas they kick off or join. It’s the wonderful virtuous cycle that drives innovation in Silicon Valley.
Marvin’s Best Weekly Reads September 6th, 2020
“Wherever there is oppression, there is resistance” --Zhou Enlai, 1972
“But the pandemic and the subsequent ‘new normal’ across Europe has pushed neobanks to the edge. With not a penny of profit yet between them, the pandemic was an opportunity for the startups to strengthen their relationship with users, and come out of the lockdown having proved their value over the big banks they sought to disrupt.
This simply didn’t happen. Instead the prospects of the European neobank withered, unused and unloved in the wallets of their users. For years, no one has had reason to question the claim that the bank of the future would be a neobank, but as revenues dwindle, regulatory obligations sap energy and long-serving staff wave goodbye, the basic promise of Europe’s neobanks to deliver on this is fading fast.”
"You cannot be a successful investor by believing what everyone else believes, otherwise you would (literally) miss out on every single increase in value. The best investors I know are not necessarily the great spreadsheet makers (no shade to spreadsheets, I love spreadsheets!), they’re the people who have really unique perspectives and strong intuition + conviction. You have to do real analysis and work to make a call about what the future might look like. I think you have to look outside of just “data” too. Like you said, everyone has data."
https://alexdanco.com/2020/08/28/the-se-suite-an-interview-with-julie-young-gift-culture-part-2
What a crazy story. A Must read.
"The case had come to remind Reed of the saying “perception becomes reality.” It seemed to him that Ted Wright had almost willed this character of “T. R. Wright” into existence. From the time he was a schoolkid wearing a suit, he was determined to become a larger-than-life persona, projecting the confident James Bond image in the stories he told his friends and, later, in his social media feeds, even when he might have been struggling financially. By the end of the period under investigation, Reed said, T. R. was “pretty close to everything he was representing himself to be.”
“I got to the point where I was probably too arrogant and cocky for my own good,” T. R. said. “I thought that I would never be arrested, or that I could buy my way out of it. That’s how things work in the rest of the world.”
https://www.texasmonthly.com/articles/it-was-never-enough/
"28% of restaurateurs are shrinking their menus because of the pandemic. That number is so large that New York Magazine recently asked, “Is It Time To Get Rid of Menus For Good?”
The underlying reasons for this are financial: Restaurants can’t bother with low-margin dishes. They have fewer employees on the payroll, so they want to be more efficient with a smaller set of meals. They’re prioritizing fewer — and cheaper — ingredients.
But rewriting a menu is no simple task. Every inch of text, from the typeface down to the order of items, must be workshopped for maximum profitability.
And when restaurants need help, they turn to a niche, little-known cadre of professional “menu engineers.”
https://thehustle.co/meet-the-menu-engineers-helping-restaurants-retool-during-the-pandemic
BTW: Most LPs will not do this because they are too risk averse.
"For LPs, being “defensive” means investing in existing funds, established funds, and large “index-like” funds. If an LP has already invested in a GP and they are doing well, it is very likely they will receive another check in 2020.
Yet, we know there are emerging managers (EMs) today who are building the next Andreessen Horowitz or Lowercase Capital. We know there are opportunities to ignore the conventional wisdom and build a new, more sophisticated venture fund.
“There is rationale for being thoughtful and aggressive,” said Conrad Shang, Director of the University of Texas/Texas A&M Investment Company (UTIMCO). “While some LPs are dragging their feet, use this time to invest in notoriously hard-to-access funds and back the new innovative batch of promising general partners.”
"To recap, this is a gaming company that launched one of the number one games on the planet, and also built an e-commerce platform… and a payments/wallet platform… And all three of these efforts gained huge traction simultaneously, despite requiring very very different types of talent, skillsets, and resources.
American investors and product people tend to flinch at diversification that appears orthogonal in this way. But when you look at Sea’s chosen businesses in the context of “How do we best engage the high ARPU internet user in SE Asia?”, these three areas make a lot of sense. Sea wants to own the wallet and all of the commerce that users engage with - both for physical items (Shopee) and digital entertainment (Garena)."
https://julieyoung.substack.com/p/thoughts-on-sea-limited
These are great predictions. Community will be huge in the present and post Covid World.
https://macredd.in/2020-community-predictions
The Bull case for New York City. Never count the place out. I personally cannot wait to visit when this Covid mess is over.
"More than one-third of the city’s inhabitants are foreign born! This diversity applies to industries: tech isn’t even in the top five for numbers of people employed! Since moving here four years ago, I’ve made friends in industries from art, fashion, journalism, media, politics and more. I love going to dinners with friends where no one talks about tech. This diversity of industries that make up New York will hopefully also make it more adaptable to the evolving economy in the years head."
https://medium.com/@robbailey/why-i-am-long-nyc-9e982d16078e
"Across each category of deep tech, we go through a hype cycle that leaves scars at the firm & market level, almost killing entire categories for VCs (try raising a VR series B+ over the past few years, for example).
Often these deep tech companies require patience as commercialization metrics lag traditional companies, with upside that is arguably not as asymmetric across all categories. This creates a valley of despair for many companies that were able to raise seed & A capital, but where series B firms struggle to gain $25M+ check size conviction without material social proof and company comparable metrics.
If a company is able to break through that barrier (often with great narrative and early signs of commercialization) then there is a secondary exhaust when it comes time to raise growth capital, as growth stage investors are even less primed to dream big without consistent revenue figures or scalable, decent-margin revenue, with a diversified customer base.
As Deep Tech has become a category, the universe of investors & well-funded companies has grown materially over the past decade. This has led to a large number of companies that are growth-ish stage, looking for liquidity.
Enter SPACs."
https://notes.michaeldempsey.me/post/627519998424907776/deep-tech-spacs/
Good advice for new VCs.
“Palantir’s core business, and probably its most profitable business, is its government business — especially work for three-letter agencies and the Department of Defense,” Garg said. “I don’t think that’s going to change.”
What remains to be seen, then, is if Palantir’s ability to marry 21st-century Silicon Valley disruption to 20th-century defense contracting will live up to its valuation when it hits the stock market."
https://www.vox.com/recode/2020/7/16/21323458/palantir-ipo-hhs-protect-peter-thiel-cia-intelligence
"Contrary to popular belief, Peter Thiel believes that technological growth has stalled, and that it has been this way for a while.
His claim is that we've had this narrow cone of progress around the world of bits—around software & IT — but not atoms. The iPhones that distract us from our environment also distract us from how strangely old & unchanged our current environment is. If you were to be in any room in 1973, everything would look the same except for our phones.
In the 50s and 60s, technology meant atoms and bits. It meant biotech and medical devices. It meant nuclear power, new forms of energy, underwater cities, the green revolution in agriculture, space travel, supersonic aviation, flying cars, etc. But, today, our only progress is in the realm of computers."
"Today, we live in a world where we've been working on the Star Trek computer in Silicon Valley, but we don't have anything else from Star Trek. We don't have the warp drive, we don't have the transporter, and we can't re-engineer matter in this cornucopian world where there is no scarcity."
https://eriktorenberg.substack.com/p/the-world-according-to-peter-thiel
This is really smart. Great for creative economy.
"Creator commerce platform Teespring is set to roll out the integration soon, and it’s currently being tested with a limited group of users. Thousands of TikTok creators have already partnered with Teespring to start creating merchandise they can sell to their followers. The integration will allow “creators to create their own products on Teespring, push it directly to TikTok, and then have fans be able to buy products directly through TikTok,” Teespring CEO Chris Lamontagne told The Verge. It marks the first time that creators can sell their own merchandise directly through TikTok."
Stripe is the company to watch in my opinion.
"Building the economic infrastructure for the internet, and ultimately the Metaverse, is a massive responsibility. I wouldn’t trust Mark Zuckerberg with it. But Stripe possesses another cornered resource - the Collisons themselves. Their demonstrated thoughtfulness, appreciation of nuance, and dedication to intellectual rigor make them the most appropriate stewards of a new economy."
"I’ve heard a variant of that idea from people who either wouldn’t work for anyone but Stripe or wouldn’t leave their current role to go anywhere except Stripe. PayPal and Adyen, while both seemingly well-run companies, don’t seem to inspire that same fervor. Over years and decades, the effect of hiring the best people and setting them loose on big problems together compounds and lengthens Stripe’s lead."
https://notboring.substack.com/p/stripe-the-internets-most-undervalued-ec3
Absolutely fascinating, platforms for indie rap artists. Creator economy is one of the more exciting areas to explode & underpins this.
"These new services address lingering pain points, especially in distribution. Stem and UnitedMasters help artists get their music on streaming services, simplify royalty splits, and gain access to brand partnerships. SuperPhone and Community show how far texting has come. Not too long ago, Mike Jones gave out his actual phone number and he got called 40,000 times a day. What a time. Long live 281-330-8004.
These businesses line up with the broader trends in the “creator” ecosystem. Email newsletter services like Substack were first built to breed more success stories like Ben Thompson’s indie publication, Stratechery. OnlyFans has evolved from an X-rated membership platform to an informal paywall for Instagram-style content. If there’s an audience to monetize, there’s a startup that’s on it.’"
https://trapital.co/2020/08/31/why-hip-hops-indie-economy-has-taken-off/
If someone can pull this SPAC off, this is the team. Very impressive.
I don't agree with everything in this article as it reflects the popular all tech rich are evil BS but it's definitely food for thought.
"For there’s the real rub with digital isolation — the problem those billionaires identified when we were gaming out their bunker strategies. The people and things we’d be leaving behind are still out there. And the more we ask them to service our bubbles, the more oppressed and angry they’re going to get.
No, no matter how far Ray Kurzweil gets with his artificial intelligence project at Google, we cannot simply rise from the chrysalis of matter as pure consciousness. There’s no Dropbox plan that will let us upload body and soul to the cloud. We are still here on the ground, with the same people and on the same planet we are being encouraged to leave behind. There’s no escape from the others."
The Privileged Have Entered Their Escape Pods | by Douglas Rushkoff | Aug, 2020
Prescient: nails the dangerous situation America finds itself in.
"Know who’s having fun tonight? All of the BLM “organizers” & all of the Antifa “cadres” & all of the Proud/Boogaloo “boys” & all of the MAGA militia “soldiers”, that’s who.
"How do we stop the violence & the carnage of these bullshit and criminal “fiery but mostly peaceful” night time waves of destruction, &– increasingly – the bullshit & criminal confrontations between rival political supporters?
How do we stop burning down the wrong things so we can get started on burning down the right things?
We change the narrative that these burners & looters & counter-burners & counter-looters tell themselves. We make it not fun, for the burners & looters as well as for the counter-burners & counter-looters."
We make it not fun by removing the thrill of the chase and the thrill of the fight – we contain the rioters and the night time looters – so that all that is left is the boredom of walking around and yelling into the wind all night. We accomplish this with numbers and curfews.
That’s how we work our way through this.
We accommodate protester voice through new elections/plebiscites, & we contain criminal tag-alongs with sheer numbers of trained public safety officers.”
https://www.epsilontheory.com/lucifers-hammer/
Damn, no wonder 2020 has been so rough. This year cannot end fast enough.
https://theirrelevantinvestor.com/2020/09/01/all-wrapped-in-one/
The man knows what he is talking about.
“When you’re first starting and you may or may not have a job, or you’re at a complete uncertainty about your career, what I learned early on is that if I put in the effort, I can learn almost anything,” he says. “I taught myself technology… it was time consuming, and painfully so, but that investment in myself has paid dividends for the rest of my life.”
Although it seems like an obvious solution, it’s actually the one piece of advice Cuban would give his 20-year-old self if he had to restart his entire career in 2020 with only a $20 investment. Given how the pandemic has impacted the job market, Cuban also has a thought about monetizing a form of tech everyone knows about but has no idea of all its functions: Amazon's Alexa.
“Particularly now with the pandemic, we’re trying to go touch-free,” he says. “The ability to use ambient voice to really help your business—nobody’s doing it very well. So I’d be all about that and I think I’d be able to build up a nice little business doing that.”
https://www.menshealth.com/entertainment/a33822107/mark-cuban-financial-advice/
I like this. It’s never too late.
https://schlaf.me/nevertoolate/
This is a fascinating tweet thread on Joe Rogan.
https://twitter.com/APompliano/status/1300963994258354181
This is a great thread on the brilliant Balaji.
https://twitter.com/dickiebush/status/1301241471782318080
This is why the Samwer brothers are scum. But to be fair the other investors are idiots for investing without doing DD on their rep of slash of burning previous investors.
"Imagine you and I own half each of a $100,000 sports car that has another $50,000 locked in the trunk. The problem is that I have the car keys, so you can neither drive it nor access that money. I offer to buy you out for about $50,000. Fair deal?
You’d doubtless feel hard done by. Yet Oliver Samwer, chief executive officer and founder of Germany’s Rocket Internet SE, is making a similar proposition to his fellow shareholders. He wants to take the web-investment company private again, and he’s offering to buy out other investors in a way that would let him and his family keep that nice little stash in the trunk."
This was an amazing teardown of an Emerging VC Fund Manager's deck. Super insightful.
https://labyrinth.substack.com/p/alpha-bridge-deck-review-by-superlp
"Vaccines, like most injectable drugs, need to be packaged in sterile glass. Glass is essentially impermeable to corrupting gases like oxygen while even high-grade plastic lets some air inside. Making these vials was a big business even before Covid-19 appeared in January. Last year, the global pharmaceutical industry purchased some 12 billion vials.
The Stevanato Group, a 71-year-old family-owned firm, provided more than 2 billion of those (The company is also the world’s largest manufacturer of cartridges for insulin pens). A Covid-19 vaccine, which likely will have to be administered in two separate injections, will require billions of additional vials. Stevanato expects the pandemic to drive up demand for its glass vials by 20% over the next two years."
This is gold for SaaS founders. Churn is a killer of businesses if you don't watch it closely.
https://davidcummings.org/2020/09/05/the-four-ways-to-calculate-saas-churn/
"This is why I think “no code operations”** is the next great job in tech. If I were thinking about how to break into a startup right now, I would start building with these tools immediately.
Even better, I’d start my own business on the side with only these tools. How far can you get with Airtable, Zapier and a website? Go for it, and develop your go-to-market chops and business building prowess along the way."
https://blog.usejournal.com/why-no-code-operations-is-the-next-big-job-in-tech-b8bb886378ac
“This is the VC version of the future of work,” said Bi, who managed a remote-only workforce for 10 years. “With Rolling Funds, micro LPs from all over the world now have access to invest in the next wave of underestimated innovators.”
https://angel.co/blog/super-angel-gp-launches-rolling-fund-with-global-lp-base
The West (coast) is the best?
"In the West, elites make their fortunes in building things (rather than collecting rents), and then rejoice in turning around and funding the nascent startups that challenge the very companies that made them wealthy, just for the goddamned lulz of it.
In the West, you are an individual. Whether your provenance be Boston or Bangalore, your family descended from brahmins or the actual Brahmins, the perceived value of your future arc matters more than your past or parentage.
In the West, hard-fought and daring failure is more noble and marketable than steadfast respectability.
In the West, dropping out of a storied institution to actually create something is more lauded than having graduated from it.
A place, in short, where the past, rentier capitalism, and “that’s just the way it is” trade at a steep discount, and the future, wild-eyed schemes, and “…one more thing” command the highest premiums."
https://pullrequest.substack.com/p/make-westing
Some impressive investors and people now striking out to do the Solo Capitalist thing.
“I felt like venture was changing enough that I could be a more independent player with a smaller vehicle but still go play with great companies,” said Sarver, who is restarting his venture capital plans after having spent five months setting up Frontline Foods, a not-for-profit delivery service for hospital workers and others on the front lines of the pandemic.
Sarver is part of a new wave of VC investors leaving bigger firms, many with plans to set up their own funds. It’s a growing list that includes Nikhil Basu Trivedi, formerly of Shasta Ventures, and Li Jin, previously a partner at Andreessen Horowitz. While venture capitalists have left established firms in the past, more appear to be taking the solo plunge these days."
https://www.theinformation.com/articles/venture-capitals-new-guard-goes-solo
Cool story.
"Soon after the coronavirus lockdown hit, some peculiar posts appeared on the New York City forum of Reddit, a popular discussion site. A user calling himself “meat boy” was offering crazy low prices on cuts ranging from drum sticks to pig lips at an obscure Chinatown butcher shop.
“Let your poor and broke ass friends know that they don’t need to starve in times like this,” he wrote.
The missives, which offered even steeper discounts to folks in need, were long, funny and rude. There were 26 F-bombs in one post alone.
They garnered thousands of likes and hundreds of comments on the usually curmudgeonly forum.
“Heart of NY right there,” was a typical response.
“Meat boy,” I learned when I called, is Jefferson Li, a 28-year-old military man who works at the butcher shop with his parents. His folks immigrated in 1985 from China’s Guangdong province and speak little English.
Mr. Li said he hoped to lure new customers to the struggling store, which caters largely to Chinese immigrants.
His dad worked long days at the shop for decades and drove a taxi at night. “I can’t stand to see all that effort go down the drain,” he said."
Why is none of this surprising?
Dan Bilzerian=Fyre Festival.
Fake it till you make it is a real thing. He is a character and have definitely enjoyed the show.
https://www.forbes.com/sites/chrisroberts/2020/07/09/dan-bilzerian-is-a-renter/#4de474547df5
The Right Leader at the Right Place & Time (or NOT): The Crucible of History and Business
Been watching a lot of World War 2 documentaries while in Shelter in Place these last few months.
Two clear examples in history stand out to me. These two pivotal battles could have gone either way with the outcome literally turning the war around. For non-history folks, these were the battles of Midway in 1943 with Japanese Navy versus the US Navy. At Stalingrad in 1942, it was German army versus the Soviet army. I guess we were lucky that our enemies had very conventional leaders such as Paulus (at Stalingrad) & Nagumo (at Midway) at the helm. These were inflexible commanders who followed the book & war plans to the tee. Not only this but they were not flexible enough or independent minded enough to take initiative or question orders.
At the critical point in time, the “by the book” Japanese & German leadership, could not step out of the doctrine and take the initiative.
I’ll give specific examples, at Midway when the Japanese had located the American fleet, they had part of their air wing ready loaded and ready for attack. But doctrine stated that only air attacks could only happen when there was full air wing ready. So Nagumo waited. This cost them time and allowed the Americans to launch their airwings earlier and beat them to the punch.
Both compounded bad decisions even when the data showed their original decision was wrong. Both put off the hard decisions to correct this ie. they were indecisive.
The original plan was to attach the land base at Midway island for 3-4 days, but when there was confirmation that the US Navy was closer than expected. Nogumo still decided to continue the land attack because that was the plan.
In the Eastern Front, by the end of 1942, it was clear Paulus and his German 6th Army was surrounded by the Soviet army. They were fast running out of ammo, food and winter supplies. Paulus continued to follow nonsensical orders from HQ to fight to the end. He refused to take initiative and break out of Stalingrad. He was trapped and his army was destroyed. From a number of 300,000 at the beginning of the battle, 91,000 were alive to march into captivity.
So why do I talk about history. There are plenty of lessons here. One lesson is that there are different leaders for different times. Both Paulus and Nagumo were “peacetime leaders” who came up through the ranks in peace time but when the crisis hit, it became clear they were not the right people. And their followers and soldiers paid for it. This is no different than a founder at a fast growth startup who then hits a major crisis whatever it is.
A crisis crystallizes what kind of leader you have. You literally cannot hide. Most folks crumble at this time or just disappear from sight. That is my frustration with these kinds of peacetime, bureaucrat leaders. They are so risk averse they just sit and wait or even worse, go into analysis paralysis mode. This critical point is when the rank and file need clear strong leadership as an example & to keep morale up. Your job is to show that there is light at the end of the tunnel.
True leaders step up during this time, are front and center of the organization and take the initiative to get through it. They take strong decisive action because they know that even if the decision is wrong at least there is movement. I’ve learned that being decisive is important. There is a 50/50 chance you could be right. In most situations, sitting around and waiting for more perfect information, it is almost always a 100% chance you are toast in the end.
Reminds me of the Prepper saying “What do you call people who overreact during a crisis? You call them Survivors!”
The Evolution of SaaS
The “Invest Like the Best” podcast interview with Eric Vishria of Benchmark Capital was probably one of the best recent ones I've listened to.
Businesses have gone from using software to businesses actually being encoded in software.
So business interactions happen through Application Programming Interface (APIs). Eric highlights a great framework to understand the different generations of SaaS in a fascinating discussion. David Cummings does a great job summarizing this here: SaaS Generations 1, 2, and 3
- Gen 1: Better delivery (vendor hosting) and economic (recurring rev) models
- Gen 2: Better adoption model (user-friendly, easy, cheap = bottom-up, "micro adoption")
- Gen 3: Encoded in software (from GUIs & price/user to APIs & price/usage)
Source: https://twitter.com/joaohlisboa/status/1291158198523699200
I’m going to give some more details below.
First generation of SaaS: Big ticket, enterprise sales and major implementation. The key customer segment is Fortune 2000. High cost to failure. Single instance & macro adoption where the executive level and entire organization needs to buy in. Business model Seat & licence and maintenance model. More Sales led. Moats are systems of record & large enterprise sales team.
“The huge innovation is the ability of the software vendor to abstract away most of the customer headaches that come with managing software and deliver it as a monthly or annual fee. This, combined with more efficient product development, due to customers always being on the same version, makes for an excellent business and customer model.”--David Cummings
Oracle, SAP, Salesforce, Servicenow, Peregrine are examples here.
Second generation of SaaS: where the competitive edge was great User Interface UI) /Graphic User Interface (GUI). Human lead and thus go through UI. Very cheap and low cost to failure. Micro-adoption model: “Try and toss mentality.” where only a small part of the organization needed to buy in. Opens up mid-market and SMB market. Huge new changes in pricing model from seat based to transaction & volume based. More marketing led.
“2nd generation SaaS is bought differently than 1st generation SaaS and feels more natural as both a buyer and user of the product.”--David Cummings
Economic model has a much more consumer type level of adoption where the user base is very large. Defensibility has become more like a platform for customers where there are network effects of data or customer usage.
Examples are Zendesk, Asana, Docusign, Slack etc.
Third generation of SaaS: is the extension of second generation SaaS strategies. But the new competitive frontier has shifted to API (Application Programming Interface). So it’s software talking to software via API. The people are being abstracted away. This is pushing the automation of processes in companies and enables speed of digitization in all businesses.
“APIs are the building blocks of modern software development representing re-usable components that make programming faster and more productive. APIs can now power many aspects of software that 5-10 years ago would have been custom.”--David Cummings
Because of this we see the rise of specialist software going after narrow customer segments. Ie. Twilio, Stripe, RapidAPI, ANAplan, Zuora
The big untapped opportunity for more customer value (and lock in) is a cross customer perspective that only the 2nd & 3rd generation SaaS companies can do. If you take some of this anonymized data you can come up with benchmarks or leverage relevant data points to help another customer. This is similar to what Stripe Radar is doing by leveraging anonymized customer IP data from their customers and helping prevent fraud for other customers.
2020 is the exclamation mark to this.
Data on the magnitude of cloud acceleration in 2020 (WSJ): In Q2 2020 alone, enterprises spent $35B on cloud software and services, up nearly $8B compared to Q2 2019.
https://twitter.com/chetanp/status/1295058029071671296
The Cloud is just getting started, so we are just at the beginning here. VERY Exciting times ahead for SaaS founders and investors.
Taiwan: The Hinge of the Global Artificial Intelligence (AI) Arms Race
“AI will be a huge technological revolution, even bigger than the Industrial Revolution. It will have a lot of consequences, create a lot of value and wealth, but it also brings about a lot of challenges.”1 --Kai Fu Lee
The leaders of the world’s great powers have made themselves very clear. They believe they need to dominate AI technology. The United States is the leader for now. Yet America’s rivals are working hard to reduce this edge.
Vladimir Putin remarked in 2017: "Whoever becomes the leader in this sphere will become the ruler of the world."
China’s Xi Jianping has said “he wants China, by year’s end, to be competitive with the world’s AI leaders, a benchmark the country has arguably already reached. And he wants China to achieve AI supremacy by 2030.”2
AI will be used not just for commercial reasons but also for the military. This is crucial for cybersecurity, for autonomous driving & flying and robotics.
“For China’s part, mounting investment in autonomous weapon development is a key plank in its ongoing effort to usurp American military dominance. Almost all large-scale AI programs in China benefit from massive governmental support and a huge trove of data, and it’s autonomous weapons program is the jewel in Beijing’s AI crown.
A further dimension to China’s AI strategy is economic, with Beijing seemingly interested in profiting from its autonomous weapons program as a new export product.”3
This is no different from the goals of the USA or other major powers; AI dominance is THE MOST important strategic initiative for the future. But the critical piece that often goes unrecognized is Artificial Intelligence’s dependence on microchips. This is especially so in the case in China.
China’s Chip Gap:
“China will still lag behind America in computing hardware in the near term. Just as data must be processed by algorithms to be useful, algorithms must be instantiated in physical strata—specifically, in the innards of microchips…..The most sophisticated chips are arguably the most complex objects yet built by humans. They’re certainly too complex to be quickly pried apart and reverse-engineered by China’s vaunted corporate-espionage artists”.4
“What AI chips do is optimize performance for specific tasks further down the AI stack. For instance, an AI chip can be tailored specifically for facial recognition, autonomous driving, or cloud computing. The best of these chips represent the bleeding edge of global semiconductor technology, and have grabbed the attention of Washington and Beijing. The Trump administration sees Chinese semiconductor progress as a grave economic and national security threat, and hopes to use a combination of sanctions and incentives to slow down China’s work on AI chips.”5
America used to be the leader with big chip players like Nvidia and Intel. But this expertise is slowly degrading in the USA, as best exemplified by US Chip giant Intel. A Chip giant who “admitted….. that it could actually partner with another semiconductor foundry to help with its next-generation manufacturing technology, as it announced a delay in its next process technology for future chips.
That was a huge admission of defeat for one of Silicon Valley’s most iconic companies. Intel is one of the last remaining semiconductor companies that still uses its own fabrication plants (also called fabs) to manufacture most of its chips.”6
It should be clear that Microchips are now a major chokepoint for China’s AI ambitions. The critical component of microchips and microchip parts are becoming a big tool used by the present US Administration to hammer the Chinese. One the most public examples, the American government has spent the last half decade undercutting the big Chinese telecom equipment provider Huawei by cutting them off from big global chip suppliers.7
“China needed to build more advanced and sophisticated products on par with the United States. However, most of these products required custom chips — and China lacked the domestic manufacturing capability to make them. China uses 61 percent of the world’s chips in products for both its domestic and export markets, importing around $310 billion worth in 2018. China recognized that its inability to manufacture the most advanced chips was a strategic Achilles heel.”8
China’s Big Chip Push:
China is not sitting back nor taking this quietly. They have made concerted efforts to build their own capabilities in microchip production. Officials in Beijing have made it their priority to build a self sufficient industry that will withstand American sanctions and compete at the global level. They are doing this by different levels.
At one level through legitimate means in big government policy and investment. A clear example being the push and support of Cambricon Technology.
“China's flagship artificial intelligence chip startup Cambricon Technologies is set to raise 2.58 billion yuan ($368 million) in its initial public offering that Beijing hopes will accelerate its challenge to dominant U.S. rivals.
The IPO on Shanghai's STAR tech market would be the first by a Chinese homegrown AI chip startup and would underline Beijing's commitment to facilitating capital flow to strategic chip developers. It follows a plan by Semiconductor Manufacturing International Corp. -- China's biggest contract chipmaker -- to raise at least $6.55 billion in the biggest-ever offering on STAR, which China touts as its version of the U.S. Nasdaq market.”9
At another level they are bridging the skill gap and hiring experts. Two newly established Semiconductor firms in China, Jinan and Hongxin Semiconductor Manufacturing Co (HSMC) have poached about 100+ engineers from the big Taiwanese semiconductor giants in a push to develop 14 and 12-nanometer chip process technology. This technology is still 2-3 generations behind Taiwan but still cutting edge for China.10
And at a more base level, the old fashioned way of stealing that knowledge through industrial espionage and cyberhacking. As recently as August 6th, it was reported by cybersecurity firm Cycraft that there was a hacking campaign that specifically targeted at least 7 Taiwanese chip firms over the last 2 years. This campaign was “aimed at stealing as much intellectual property as possible, including source code, software development kits, and chip designs.”
“CyCraft concedes it can't determine what the hackers are doing with the stolen chip design documents and code. And the more likely motivation of the hacking campaign is simply to give China's own semiconductor makers a leg up over their rivals.”11
This is a national priority for China as semiconductors are now among their most critical technology bottlenecks. “Semiconductor Manufacturing International Corporation (SMIC), the country's largest chipmaker, remains stuck anywhere from three to five years behind industry leaders Intel, Samsung and TSMC, according to Triolo, of Eurasia Group.”12
Three to five years is a very long time to be behind in technology years. So this is leading to even more global dependence on the giant Taiwan Semiconductor Manufacturing Company (TSMC). So let me explain the fascinating world of the Chip industry.
The Chip Industry=Taiwan:
“There are two types of semiconductor manufacturing companies in the chip industry. Some (like Intel, Samsung, SK Hynix, and Micron) design and make their own products in factories that they own.
There are also foundries, which fabricate chips designed by consumer and military customers; TSMC is the largest of these in the world. The chips that TSMC makes are found in almost everything: smartphones, high-performance computing platforms, PCs, tablets, servers, base stations, game consoles, internet-connected devices like smart wearables, digital consumer electronics, cars, and almost every weapon system built in the 21st century. About 60 percent of the chips TSMC makes are for American companies.”13 “In short, TSMC is the best chipmaker in the world, no matter what vector of performance you care about.”14
TSMC had a dominant 50% market share in 2019. Another big Taiwanese Chip player United Microelectronics Corporation’s (UMC) has 7.5%. If you include some of the other global players who also have microchip fabs in Taiwan, Taiwan’s centrality to this industry becomes very clear.15
For those who are fans of “Dune”, Taiwan is the new “Arrakis”, a place that is the only source of a material critical for everything! In this modern case, Microchips replace the Spice.
Ben Hunt goes on to say:
“There is no future where the United States can both maintain its existential national interests and allow the world’s principal supplier of semiconductors to come under the direct political control of China.
And there is no future where China can both maintain its existential national interests and allow the world’s principal supplier of semiconductors to remain outside its direct political control.”16
Net Net: If Artificial Intelligence is the next BIG strategic initiative for all world powers, Taiwan has become the linchpin in the global AI Arms Race.
As a business person and biased Taiwanese- American/Canadian, it is critical for the United States and western countries to ensure the future of Taiwan’s independence against China’s growing belligerence. Look no further than at China’s despotic acts in Hong Kong or Xinjiang to be concerned. “The West probably would like to help protect Taiwan not just geopolitically, but because of this technical prowess and technical capacity there," said Brad Swanson of the American Enterprise Institute.
Strategically, the USA needs Taiwan, as much as Taiwan needs America’s military and economic support. From an Information Technology perspective, Taiwan has always been a crucial piece of the consumer technology industry (PCs and Laptops). Just think back to the delays in the supply chain caused by the major earthquake in Taiwan back in 1999.
Taiwan has now become even more central, with the growing importance of Microchip manufacturing.
Investment Analyst Gavin Baker states:
“Modern semiconductor manufacturing is at least as important to the economy as oil was in the 1970s — at least in the case of oil, it was available all over the world albeit at higher prices than in the Middle East. If the overwhelming majority of leading edge semiconductor manufacturing is concentrated in Taiwan with the rest in South Korea, then the geopolitical implications are significant as there is no cost curve with leading edge semiconductor manufacturing — either you can do it or you cannot. It would be as if the Middle East was the only place in the world with oil rather than simply the region with the lowest costs.”17
It is quickly becoming the next flashpoint between China and the United States as it was in 1949. If the United States does not prioritize Taiwan’s independence and defense, they will be undercutting America’s own long term national security, economic and military interests but that of much of the democratic countries in Asia and Europe as well.
Big Thanks to John Lanza and Jason Scott for their valuable feedback and helping me get this to readable form.
Sources:
(Source: Kai-Fu Lee on the Future of AI in the United States and China)
(Source: https://www.theatlantic.com/magazine/archive/2020/09/china-ai-surveillance/614197)
(Source: The AI Arms Race in 2020. The UN says we have entered… | by Matt Bartlett | Jun, 2020)
(Source: China's Artificial Intelligence Surveillance State Goes Global)
(Source: Intel admits another defeat with unprecedented manufacturing issues)
(Source: U.S. moves to cut Huawei off from global chip suppliers as China eyes retaliation)
Steve Blank
(Source: China's top AI chip unicorn to raise $368m in Shanghai debut)
(Source: China hires over 100 TSMC engineers in push for chip leadership)
(Source: Chinese Hackers Have Pillaged Taiwan's Semiconductor Industry)
(Source: TSMC walks tightrope between US and China as Intel falls behind)
(Source: The Chip Wars of the 21st Century)
(Source: Chips and Geopolitics)
(Source: TSMC is outperforming the shrinking foundry market)
(Source: TSMC is outperforming the shrinking foundry market)
(Source: Investing Mistakes, Chapter 1001. Investing is a difficult, humbling… | by Gavin Baker | Aug, 2020)
Marvin’s Best Weekly Reads August 30th, 2020
“At the end of hardship comes happiness” — Korean saying
This is an Amazing tweetstorm. Josh Waitzkin is one of the most brilliant individuals around. Here are some of his mental models.
https://mobile.twitter.com/george__mack/status/1292206014746558471
2. Talk about a rags to riches story. Love reading these kinds of immigration stories.
“In the local real estate rags, Lo is a misfit in a sea of manicured headshots.
He sports a jet black, Elvis-like pompadour, ostentatious spectacles, and bespoke pinstripe suits. He poses in outrageous positions. He plasters his full-page ads with slogans like “I caught a fish!” and “Wild and scary good!”
But if you take a look at the sales records of all those mansions, you’re likely to see his name.
Over the past 4 decades, Lo has sold nearly $6B worth of houses in the San Francisco Bay Area. Last year alone, his sales volume topped $347m — good enough to rank him in the top 5 broker-owned firms nationwide. In the process, he’s helped reshape the demographics of some of America’s priciest neighborhoods.
Who is this guy? And how did he rise to the top of one of the most competitive real estate markets in the world?”
Silicon Valley’s eccentric real estate king
3. This shows how broken the programmatic ad world aka adtech is. And at the expense of the advertisers and news publishers too.
https://www.wired.com/story/she-helped-wreck-the-news-business-heres-her-plan-to-fix-it/
4. The Toy company no one knows about. MGA. Amazing.
“In 2001, MGA encountered their first massive success with the launch of Bratz Dolls. In 2006, they acquired Little Tikes (makers of this thing). And in 2016, they launched the one-and-only L.O.L Surprise! dolls.
I’m guessing MGA has been doing $5–6 billion in revenue per year for the last few years, driven almost entirely by LOL dolls. Given that the US toy industry is relatively small (~$27 billion), it’s insane that MGA has captured such a big percentage of market share.”
“Today, there is more IP that exists in a transmedia way. Some obvious examples include Marvel and Pokémon. Less obvious examples include the Kardashians, the Hype House, Sesame Street, hit Roblox games, and Miquela. The characters we know and love can live on many platforms concurrently.
We familiarize ourselves with these worlds, and we watch narratives play out, to some degree, with our own time and space. Increasingly, we are also able to interact with them on “metaverse” platforms such as Roblox, Fortnite, and Niantic [games].”
“Insane Companies No One Talks About” Episode 2: MGA Entertainment
5. Robinhood doing very well. Interesting business model that does not totally fit its name.
“The pandemic forced millions of future Robinhood customers home to shelter in place, free from diversions like sports and armed with fast internet connections and free money from the government.
The result was unprecedented growth for the upstart brokerage. Robinhood now has more than 13 million registered customer accounts, nearly as many as venerable Charles Schwab, which after 49 years has 14 million funded accounts, and more than twice as many as E-Trade, with 6 million accounts.
“The secret sauce of Robinhood’s success is something its founders are loath to publicize: From the beginning, Robinhood staked its profitability on something known as “payment for order flow,” or PFOF.
Instead of taking fees on the front end in the form of commissions, Tenev and Bhatt would make money behind the scenes, selling their trades to so-called market makers — large, sophisticated quantitative-trading firms like Citadel Securities, Two Sigma Securities, Susquehanna International Group and Virtu Financial. The big firms would feed Robinhood customer orders into their algorithms and seek to profit executing the trades by shaving small fractions off bid and offer prices.”
6. “We’re no longer dealing with a world of scarcity, where exchange economies are the default way we assign and trade value. This is an environment of abundance. There’s no material scarcity or friction at work here, but there’s still a lot of work to do. And so a new value model emerges: gift culture. And with it, a really good metaphor for how we develop and share knowledge on Twitter: “Homesteading.”
“Abundant environments may surprise you: even though they’re lacking in material scarcity or literal friction, there’s still plenty of work to do. It’s just a different kind of work: the work of dealing with complexity, clarity, curation, and especially synthesis. The effort and value being traded here lend themselves far more naturally to a gift culture economy, which is still very much an economy. It’s just not a transactional one.
The other obvious kind of work to do in an abundant environment, of course, is achieve and maintain positional scarcity. Status is clearly scarce, and in a gift culture like the free software community — or on Finance Twitter — the way you earn status is by putting in real effort, and then giving away the fruits of that effort.”
https://alexdanco.com/2020/08/21/homesteading-the-twittersphere/
7.“At YouTube, Pappas was, in part, responsible for scaling massive, worldwide growth, but at TikTok she is tasked with the opposite: Take a Chinese-owned product and tailor it to U.S. consumers, which, regardless of TikTok’s current quagmire, she’s unquestionably done. In November 2018, the month Pappas started, TikTok reportedly had 20 million U.S. users, according to Wallaroo Media; today, that number is 100 million. In the six months from October 2019 to March 2020, monthly users nearly doubled.
She might not be an influencer or a creator, but Pappas is influencing and creating. The future of technology. The future of social media. The future of how Americans connect…or don’t. The future, period — no matter where that might lead her or where she might lead it.”
https://www.marieclaire.com/career-advice/a33485889/tiktok-vanessa-pappas-interview/
8. Culture is the most important thing in companies. Organizational Leaders should be aware of this & actively shape it.
“It has been said that “culture eats strategy” and often when companies decay (Wells Fargo) or resurrect ( Microsoft) or have distinctly different outcomes in the same industry ( Southwest versus United Airlines) a key determinant is the culture. What it is like, how it is improving or how it is getting worse.
Once I read that the culture of an organization is revealed in how people behave when no one is looking or monitoring their behavior.
I do believe that this is right in the fact that culture is about people. Yes it requires leaders to set, correct and support the culture but it is how they treat people and how people feel about themselves, their company and their colleagues that is the fabric of culture.”
https://rishad.substack.com/p/leadership-culture-and-libraries
9. Great thread on an unknown but super impressive investor.
https://twitter.com/APompliano/status/1297666709944512514
10. “The role that eCommerce has played in consumer habits over the last six months doesn’t really validate anyone’s eCommerce ambitions but instead creates opportunities for more customers to be exposed to janky, half-baked online selling solutions because of a pandemic. (Shopify, AGAIN, is there to make sure these experiences are not bad!)
The chances for a business to lose customers online has never been higher. And while the TAM for many businesses has expanded on paper, never have physical-turned-online sellers had so many unhappy and desperate customers sent their way.
So as the economy normalizes, we’re going to see millions of consumers faced with a simple question: do I want to go back to my old habits or keep my new ones?
The answer to this question is the biggest threat online sellers have faced.”
11. Good discussion on the tech press in America & the lingering after effects from dominance of the big platforms.
“I think there are three algorithms that have reshaped the American press in ways that we are just now starting to confront. You have Google and Facebook, which can serve up this incredible fire hose of traffic to publishers so long as they cater to the ever-shifting whims of that algorithm.
And that has just resulted in a lot of really cheap-to-produce content like “what time is the Super Bowl” and “John Oliver destroyed this industry last night. Here’s the clip.” And all of that stuff is mostly harmless, but it has robbed publications of their individual identities. So, every website is just a version of every other website, and I think that has kind of undermined trust in the press generally because there’s just kind of a sameness to it.
Then, the third algorithm is the Twitter algorithm, where in a world that is full of calamity, only the sort of noisiest, most scandalous, most outrageous stories break through. And because that’s where reporters are hanging out all day, and where they’re flogging their stories, I do think that that has led all of us to underline the elements of scandal and outrage in everything. And that has a wearying effect.”
12. Some big changes happening in the media space.
“A new class of content creators has emerged that is writing, recording, filming, and producing incredibly unique and compelling media and then connecting directly to audiences to showcase and sell their creative products. I call them Digitally Native Vertical Creators or DNVCs. And just like their retail DNVB counterparts, DNVCs are also building off a new wave of technology platforms that have democratized access to capabilities across the entire media product lifecycle for this new breed of content creators.
To run a creative business today, Digitally Native Vertical Creators (or DNVCs) have to manage far fewer things than traditional media creators of yesteryear because they can turn to a variety of enabling platforms to do those things for them.”
New media platforms are enabling a new creator type: Digitally Native Vertical Creators
13. Exciting times.
“The rise of the micro LP should result in the need for more GPs. And more GPs should mean more funding for entrepreneurs. It will create a virtuous cycle of sorts.
It will take awareness and education before serious dollars flow to venture but I suspect in 2030 the number of accredited investors with an allocation to venture will be far higher than 3%.
The next decade is sure to be an eventful one for founders, solo GPs, and micro LPs.”
https://thecuriousinvestor.substack.com/p/rolling-funds-and-the-rise-of-the
14. “Overall I don’t think the underlying desire to become financially independent is going anywhere. In fact, I think people may become even more interested in taking control of their money and time after living through this difficult situation.
While I don’t think FIRE is going away, I do think it will change.
Short-term it’ll be harder to FIRE given the market and overall economy. But long-term my guess is that we’ll see some positives come from these hard times. I could see things changing in a few ways which all are positive:
Financial plans get dusted off: Most people roll their eyes when they think about creating and maintaining a financial plan. I suspect even many FIRE people have let their plan sit idle for a while. The downturn will push more people to create a financial plan and get back to basics when it comes to money.
Making money online will boom: The combo of job losses and everyone being cooped up at home will lead to a lot of lucrative new online businesses being created. More people will realize that creating a life changing business online is within reach.”
15. “While many companies get ahead of themselves, often targeting partners based on name or site traffic, they do not agree on broader standards to evaluate the opportunities that exist in market on a fully loaded cost basis (hint: cost does not just mean money). This is classic measure twice/saw once.
Agreeing on standards ahead of time and socializing this evaluation will save you downstream headaches and conversations, both internally (“why did we partner w/ X when it only yielded Y”) and externally (“why is this not performing like you told us it would”).”
https://medium.com/@hoff/how-to-do-bd-right-cc7b31664513
16. “In my view, however, the business of influencer bundling has only just begun. Curators are the new creators, and as consumers, we’re going to be willing to pay someone with good taste to help us sort through the ever-growing mass of information at our fingertips……..looking at the current information overload we all face on a day-to-day basis, I think there’s room for a new market of creators as curators.”
https://femstreet.substack.com/p/curators-are-the-new-creators
17. I am always impressed by what I see in the tech ecosystems of Nordic and Baltic regions. Maximum bullish here.
Diving into the Nordic and Baltic 2020 Venture Capital Landscape
“Moskovitz, 36, who is worth $14.2 billion, is best known as cofounder of Facebook with Mark Zuckerberg. He was the world’s youngest billionaire for a few years starting in 2011. But for the past dozen years since he left the high-flying social network, Moskovitz and his Asana cofounder, Justin Rosenstein, 37, have been lying low, quietly toiling behind the scenes to solve an age-old problem: how much effort we waste in the meta-work around work.
“We were just kind of shocked and frustrated at how much of our collective time was going toward trying to establish clarity and getting everyone on the same page,” Moskovitz says in a recent video call.
Today Asana’s software is used by employees at more than 75,000 companies including AT&T, Google and NASA to help them take back control of their days by managing everything from writing a memo to planning an event. (Soon its AI-powered app will even set agendas and suggest ways to make workdays more efficient.)”
18. I really like this. It’s hard not to feel like you are stagnating when you are stuck at home for months on end.
https://www.linkedin.com/feed/news/how-to-stay-forever-employable-4194585/
19. “I was interested, I said, in his life, which was marked in equal parts by tragedy and luck, populated by a gallery of figures — Richard Feynman, Philip Glass, Joseph Campbell, Forest Whitaker, Steven Spielberg — too numerous and random to fully list.
I was interested in his work too — as a creator (of video games, VR, facial-recognition software, medical-training devices), as a thinker, and as an author of four acclaimed books in the past decade about the promise and perils of technology, books that suggested he might be the last moral man in Silicon Valley.
At a moment when our tech overlords seemed bent on consolidating power and taking over whatever parts of our lives they hadn’t already taken over, Lanier — a tech insider who has been part of the industry for nearly as long as the industry has existed — had chosen instead to speak out against his peers and to suggest a different, more human logic for how they might treat the rest of us.”
https://www.gq.com/story/jaron-lanier-tech-oracle-profile
20. “Is San Francisco as a tech capital over?
There are clear short-term headwinds. Pre-Covid real estate costs in California, and San Francisco, were very clearly acting as an increasingly dissuasive force for either tech companies expanding in the region or new companies located there. All the major Bay Area tech companies had either relatively shifted hiring outside the Bay Area, or, in some cases, ceased net hiring in the Bay Area, and most of the expansion was happening elsewhere.
Overall, however, my expectation is it will return to the trend
where the Bay Area is a major locus. Human capital network effects and the benefits of agglomeration are just so strong.
At the same time, the longer-term outcome is less clear.
San Francisco has somewhat analogous long-term headwinds [with] its version of the local challenges from property prices, and then somewhat similar dynamics and international competition as other people just get good at building technology companies. But I think that’s going to be a multiyear, multi decade story. My expectation is that in 2022 to 2023, its relative position is not really that different. You don’t get many retweets for that, I know.”
21. “If you want to improve your productivity, everything should be focused on earning more. You shouldn’t focus on “learning” as you will end up going down the rabbit hole of meaningless factoids that are not applicable. The way to focus on earning is by aligning everything you do to either 1) building a reputation or 2) generating a profit. Most people ignore the first step & just want to make money “now now now”. Well, in order for people to trust you… Value needs to be added & a reputation needs to be built. The “freemium” model is one of the best ones to follow if you’re a newbie.”
“If all of the above seems mean or intense, you’re probably not going to make it in life. We’re not here to lie to people. If you cannot keep yourself accountable it just means you’re not interested in improving.
Successful people don’t day dream about scenarios that are unlikely. They don’t need hand holding to get started. They don’t ask questions that they can answer themselves in a few minutes. They don’t burn tons of time with entertainment. When you’re set for life you can increase the amount of entertainment (since you are no longer in the accumulation stage of life). Until then, best to focus on productivity.”
https://wallstreetplayboys.com/significantly-improving-personal-productivity
The “Rise” & The “Grind”
I remember coming into the office every day to an electric environment. So much energy, surrounded by super smart people. Everyone was excited. Crazy busy but excited. Hours felt like minutes. The feeling of tremendous growth and momentum. The promise of a bright future.
Contrast this with the “Grind”, where growth and momentum has disappeared. And regaining momentum is VERY hard. Just ask any startup or big company where this has happened. Turning this around is brutal. You are coming into the office where everyone is tired or worn out. You are in survival mode. People you respect are leaving for other places. You dread coming into work because you know there is probably more bad news. Or that you have to fix so much stuff that’s broken due to “startup debt.” This is the cultural, the organizational and technical issues that were overlooked during growth.
I was very fortunate to experience both in my career multiple times. The “Rise” at Alibris from May 1999 to September 2000 where we went from 18 people to 150 people. The “Grind” from September 2000 to February 2001, when we went to 110 people with the first lay off due to the Dotcom Bubble popping. I did not survive the 2nd culling which happened at the end of January 2001 where the company went down to like 75-80 people. Lesson learned, first things that get cut are marketing and customer service roles.
I experienced the “Rise” at Yahoo! Inc from 2001-2008 at the company overall and for my specific business group and region from 2008-2011. Unfortunately, what I learned here was that even if your P&L (Profit & Loss) of your Business group was great, it did not matter when the rest of the organization was in free fall. Yahoo!s nadir really started around 2009 with the loss of a tremendous amount of top talent at all levels and groups. It’s really tough when so many smart friends you have worked in the trenches with end up leaving. Looking back in retrospect, the end of Yahoo! was clear back in 2009. I remember the loss of momentum, and painfully low level of energy vividly whenever I was in our HQ in Sunnyvale. This was a MASSIVE contrast from my first 7-8 years there.
3rd times the charm right? I joined 500 Startups when we were ~30 people and saw this place boom to 150 people by mid 2017. This corresponded with a crazy amount of startup investment activity. Incredible time. All the learning, excitement, growth, surrounded by smart mission driven folks. Well, then mid-2017 hit and we were in survival mode. Those “Grind” years were really tough & stressful. I admit that. I am still processing this even after 9 months being out of the place. (This is why “Fallow Time” is important)
Both of these kinds of experiences are important to your career. You learn so much when a company scales quickly (and usually poorly). Most people are not lucky enough to see such crazy fast growth in their career. It’s like drinking from a firehouse. And it’s why you see people jump around to different companies and chase this growth throughout their careers. It’s not just about monetary rewards, although that is a very possible outcome. It’s about the excitement, the learning and fun from working with the tailwinds behind you.
But i would argue you probably learn as much from the “Grind” too. Maybe even more. You learn what you are made of. You learn what your values are and “What” matters to you. And as an executive you see all the things broken that were ignored during the high growth years and then you have to fix them. I don’t respect people who don’t stick around during the tough times to try to make things work. It shows a lack of commitment.
On the other hand, don’t do what I do and stick around much longer than you should. Loyalty only goes so far and you don’t want to go down with the ship. From a career perspective, you risk having your brand tarnished by staying at a sinking company too long.
This is where the “Goldilocks principle” comes into place: the “just about right” point in time to leave. This is something I have gotten wrong several times. And this is not a dig at any of these companies. Sometimes you just are not a fit anymore for where the company is going, or you are just too tired or burned out. And other times the company is also clearly toast and you see the writing on the wall. So take action accordingly and move on.
Startups, Do the Foundational Work: Taking Shortcuts Cut You Short
What drives me crazy is all the crappy advice and articles out there sharing hacks for startup growth. Growth is great but it needs to be built on strong foundations. Speed and a sense of urgency is definitely important.
Yet to really make this work you need to be systematic at the same time. There is a ton of homework to do. This includes Insight development, doing customer development and building. And it takes a long time. Every founder talks about Product Market Fit. But in my experience I've never seen a startup hit this Product Market Fit point faster than 2 years. It takes a LONG time to get here.
I can’t tell you how many startups I’ve met who have grown to $100k or $150k in MRR but yet still have no idea who the “Ideal Customer Profile” is, have not set up analytics or which channels work best for them. It’s like driving a car with a blacked out window and without a steering wheel. No surprise this is when the business eventually stops growing and stalls out. Or worse, goes in reverse as customers churn. There is little they can do because these founders have no idea what the drivers of their business are.
I liken building successful startups to that of building Skyscrapers. We had a lot of them being built in Vancouver where I grew up. It would be a year or more while the sand and concrete foundation was being compacted into the ground. But lo and behold, once the sand was removed and the foundation was set, the metal frames went up. Within that next year, an entire 5-10 story building was built and completed.
This is exactly the same process that my best founders go through.
They are systematic.
They do the groundwork of development insights and deep knowledge about their customer and their market.
They learn the main drivers of their business.
Sustainable growth is the consequence.
PLEASE BE THIS KIND OF FOUNDER!
The Master Plan of Gary Vaynerchuk
Whether you love him or hate him Gary Vaynerschuk is an impressive business man. He is best known, admired (and equally reviled) for being the icon of the “Hustle Porn” & Inspiring the Wantrepreneur.His image, videos and quotes can be found all over social media. He literally is a Media Company of One.
Myself, being a San Francisco-based tech guy, it has been eye-opening watching his rise in New York, then globally over the last decade and half. I’ve read all his books, impressed by his insights in where the media world is going and how to build a business on top of it. His emergence as a big business “influencer” (yes, I hate that term too) is not just emblematic of the tech driven economy. But I strongly believe his path holds great career and business lessons for all of us.
His Backstory
I think everyone knows the story of Gary Vee as he is known to his followers. He took his dad’s offline wine store, Wine Library, online and using social media grew it from $3M to 60M in revenue. But people forget he had an email list even back in 1997. So Gary was at the very beginning of the internet and the growing community online.
He wrote a book in 2009 called “Crushing it” detailing how he and others leveraged social media to build some very successful businesses and lifestyles. This was the first of 5 New York Times best selling books over the last decade.
He parlayed this into angel investing, investing in Facebook, Twitter, Tumblr, Uber, Snap & Venmo. He also leveraged some of the consulting he did for big Fortune 500 clients into building a new media focused ad agency called VaynerMedia. An agency now estimated to be billing 200M usd annually.
He has built some adjacent companies in the conference business, a new VC fund called VaynerRSE and a personality-driven media brand around himself. He does a lot of public speaking around the world either on digital media strategy or entrepreneurial motivation where he charges $120k usd per talk (+ expenses).
He is the master of building a personal brand online, with more than 12M combined followers across Instagram, Youtube, Facebook, Snap, Twitter, Linkedin & Spotify. He is so omnipresent, I doubt anyone on these channels have not run across him.
Why Gary Vee is the ultimate example of a Practitioner Preacher.
So what are the things we can learn from Gary Vee.
He leverages every single facet of his business as inputs into something larger. By leveraging his knowledge in social media marketing, he built a business from public speaking and then from his first book.
Two very clear examples:
1) Personally consulting large fortune 500 brands to building the Vayner Media agency to serve them
2) Angel investing personally to building a VC Fund
Here’s what Gary Vaynerchuck is really up to with that new $25M fund (exclusive)
Once he had structure, he built out a media company around him. With the infrastructure of his team and personally practicing live, he is on the literal edge of where the media is going. He is able to notice new channels or best practices which he pushes out to clients or his followers. This back and forth of doing, learning, sharing & feedback and doing, learning, sharing & feedback is an amazing flywheel. Concepts - The Flywheel Effect
There are very few people in the world today that have his deep insights in how to leverage social media to build a massive business. Ie. Network effects & his organization has built a bastardized version of the “Expertise Network Effect” popularized by renowned VC fund NFX (Source: The 14th Network Effect: Expertise)
“The two key distinctions of expertise nfx from other types of nfx is that a) they arise from the know-how required of a person to use a particular tool and b) the value transfer mechanism takes place through labor markets.
The results speak for themselves here which shows a full rundown of his very impressive net worth & assets.
Gary Vaynerchuk Net Worth and How He Built His Fortune
Some insights he shared in this recent video interview illustrate this perspective. These quotes below are just some nuggets of insight for those trying to keep on top of the every changing media landscape.
Source: Why Gary Vaynerchuk is 'winning' the marketing game
“Understand where People are paying attention:, I am unemotional about platform, but emotional about where consumers have attention”
“It’s the Message, not the medium”
“I’m a Day trader of where communication is, not a mutual fund of where performance was”
“Completely Platform agnostic”--really critical in fast moving media & consumer behavior changes.
“All i do is pay attention to what people are doing”
Key Lessons here:
Be Prepared to Hustle BUT ….make sure it’s something you have passion in or deep personal interest in. Basically, work hard to win but make sure it’s a game you actually want to win.
Own a Niche & Build Deep Expertise: The more narrow the better. With billions of people there will be an audience and sometimes all you need is 1000 raving fans as per Kevin Kelly. The Technium: 1,000 True Fans
Practice and then Preach: Nuff said. This is the only way you can develop the expertise and credibility.
Be a Strong Personal Brands matter. Okay to be Divisive: it attracts & repels at the same time.
Leverage Platforms but be agnostic: You should always be Audience first. Pay attention to what people are doing and where consumer attention is.
Step Ladder your initiatives from micro to macro and unify them for your own Flywheel: Think of yourself like a business (literally) and see how the different initiatives tie together and build on one another.
Build Equity.
Equity=True Wealth. “You must own equity — a piece of a business — to gain your financial freedom.” —Naval
What are Gary Vee’s Future Plans:
He is taking his platform even further. He has often publicly expressed his end goal of buying the New York Jets. An NFL team these days costs at least a cool $1 Billion usd.
As wealthy as Gary is with his stakes in VC fund & VaynerX he still has to supersize his fortune to get to the Billions (or even multi-hundreds of millions).
I believe his playbook to do this is by entering the Consumer Product Goods (CPG) game. He can leverage the massive audience platforms he has built already.
Step One:
Testing this via the shoe deal he did with K-Swiss.
Serial Entrepreneur Gary Vaynerchuk Just Landed a Sneaker Deal. Here's Why That Matters
Why Gary Vaynerchuk Is Putting His Name on a K-Swiss Sneaker
Step Two:
As K-Swiss deal clearly shows he has an audience to successfully sell into. Next up, taking equity stakes in emerging Consumer brands or starting a fully owned Consumer Packaged Good (CPG) business. He wins big when they exit in an acquisition that many of the big traditionally CPG companies are now pursuing as their growth is lagging. Mergers and Acquisitions have been very hot in the CPG space in the last half decade. Gary recently sold his “Empathy” Wine brand to Constellation Brands.
Constellation Brands acquires Gary Vaynerchuk's Empathy Wines
Step Three:
Scale up and buy a bunch of BIG and old CPG Brands. VaynerX is going to be his media platform to grow the Brand and audience, thus increasing the value of the company (and his stake).
“Vaynerchuk says building an agency was never meant to be anything but a means to an end, facilitating the necessary learnings and expertise to reach the real goal: owning brands. "I’m building a communications holding company for the sake of buying businesses and using it as a disproportionate leverage for the reboot of nostalgic brands during the next downturn of the economy.”
“For a long time, he thought he’d buy an old CPG brand, the sort of food brand you remember lovingly from childhood but that now sits gathering dust on supermarket shelves. Now he’s more interested in apparel. He’s had some success with niche sneaker brand K-Swiss, which collaborated with GaryVee on a range. And he’d love to get his hands on a brand like Lacoste.
“So when I do go and buy something – in three years or six years – I’m not going to shut down VaynerMedia. I haven’t bought any brands because I don’t want to buy them at the prices they are now. But that’s still the plan. It’s not part of the plan, it’s the plan.”
The GaryVee Content Strategy: How to Grow and Distribute Your Brand's Social Media Content
Is Gary Vaynerchuk 'wrong, wrong, wrong, wrong, wrong' about media?
We all have much to learn from Gary Vee’s career so far, which provides valuable lessons for building a business. This is relevant whether you want to build a multi-billion dollar business or a small one person business that gives you a very comfortable living.
Like most things in life, all the steps seem simple, but not easy to do. It’s now just a matter of motivation and taking action. So with these steps and a clear playbook available, the big question that Gary Vee would ask you, “How Badly Do you Want it?”
Marvin’s Best Weekly Reads August 23rd, 2020
“They muddy the water, to make it seem deep.” --Frederiche Nietzsche
1. “Zoom is the pandemic’s success story. As lockdowns around the world closed offices and made working from home compulsory for vast sections of the working population, businesses and individuals grasped for a way to carry on at a distance. If it felt like everyone was suddenly using Zoom, that’s because they were: in April, Zoom peaked at over 300 million daily meeting participants – up from ten million in December 2019. Its measurement of “annualised meeting minutes” jumped 20-fold, from 100 billion at the end of January to over two trillion in April. For the quarter ending April 30 2020, Zoom reported total revenue of $328.2 million, a 169 per cent increase from the same period last year.
Covid-19 forced the world of work to adapt. But is this a glimpse of the future of the workplace, or will our love affair with video technology dissolve as soon as the virus recedes, the office re-opens and Zoom fatigue sets in? Given a real choice, will we continue to do business via webcam – or will we leave our microphones permanently on mute?”
Zoom took over the world. This is what will happen next
2. Love this thread on the future of remote work. Or maybe it’s just work. Some provocative ideas.
https://threadreaderapp.com/thread/1294590291761037312.html
3. "As the data above reveals, in our experience investing across approximately 180 partnerships, emerging managers have outperformed relative to their established counterparts. We attribute this to a number of factors.
First, attractive emerging firms, especially “spin-outs,” are, in many cases, comprised of a small group of partners with strong track records. Rather than deploying a percentage of a larger fund, these partners are now deploying all of a smaller fund. From an investor’s perspective, this can mean more concentrated exposure to the outperforming partners.
The second reason is a simple one. Most emerging firms raise smaller funds than their established counterparts. In venture capital, smaller funds generally outperform, as a single outlier has the potential to generate strong fund-level performance, even if the fund is only able to garner modest ownership.
Finally, most emerging firms do not have to deal with generational planning in the near or medium term. Given the fact that these firms themselves are new ventures, most partners fully expect to invest for a long period of time."
https://blog.greenspringassociates.com/venturecapitalsaccessmyth?
4. Dolly Parton is not just a great entertainer but an impressive business person. And always has been. This is a great profile.
"This is Dolly Parton, Businesswoman, in a nutshell: Her sweetness and toughness coexist, never masking or diminishing the other. “[In meetings], she’s tactful in her approach, but she also will lay down what she will and won’t do,” says Nozell. “You’ll know immediately in a room that one thing you won’t be doing is taking advantage of Dolly Parton.......
Parton questions why more entertainers haven’t similarly broadened their holdings. She has always known what the pandemic has forced many in the industry to realize: that diversifying your income streams is one of the smartest things an artist can do. “I often wonder why more artists don’t do more things like that to have something to fall back on if things don’t work out the way they’d hoped — or just to have something more,” she says. “I feel like even if I wasn’t popular anymore, I could always sing at Dollywood.”
Dolly Parton Steers Her Empire Through the Pandemic — and Keeps It Growing
5. This is hilarious.
"On Benedetto’s self-described “wall of unnecessary,” you’ll find a world of whimsy: Pants with transparent pockets that are designed to hold slices of pizza; a mini-bed for an iPhone; a solar-powered t-shirt; gloves fashioned to look like Crocs.
Any serious entrepreneur knows that you shouldn’t create solutions to problems that don’t exist. But Benedetto has made a full-time living out of doing just that.
Benedetto’s inventions are partly a critique of modern capitalism. But they’re also a call to action — a reminder that we should all put our ideas out into the world, no matter how zany they may be.
“When people see my stuff pop up in their Instagram feeds, they often think they’re ads for real products,” he says. “But what I’m really doing is making fun of all the stupid products that actually exist — the type of stuff you see for sale on Wish. com and wonder, ‘Who pays money for this crap?’”
But Benedetto also hopes that Unnecessary Inventions can serve as a call to action for gun-shy entrepreneurs.
“None of this would’ve happened if I didn’t just put it out there,” he says. “Just start something and share it with the world. Trust me: Nothing is too stupid.”
The man who has created 100+ pointless inventions
6. I like and prefer this narrative for New York. But it will be darker before dawn.
"When companies go through this situation and their stock prices get clobbered, you have to ask yourself if the company is going to go out of business or not. If the answer is no, then the question becomes what price is the right entry price.
NYC is not going out of business. It will need a turnaround. It will need new leadership, which it will get. The pandemic will end. Restaurants, museums, broadway, nightclubs, etc, etc, etc will re-open.
It won’t be the same NYC that existed pre-pandemic. But that is a good thing. NYC has sucked for the last decade or more.
Many people who can will leave forever. Rents will be lower (maybe a lot lower). Artists will be able to live in NYC again.
We have the opportunity to reimagine what NYC is. We can reimagine transportation, schools, policing, housing, construction. We can create an environmentally sustainable NYC. We can create an affordable NYC. We can create a better NYC."
7. "Building in public allows founders to build teams, drive widespread support, attract investors, and foster a community of users and early adopters. Currently, some of the most well-known leaders of the “building in public” phenomenon are Austen Allred, Founder & CEO of Lambda School, Domm, Founder & CEO of Fast, and Suhail, Founder & CEO of Mighty."
https://medium.com/@gabygoldberg/the-building-in-public-how-to-guide-219d417f00c1
8. Great observations here. Worth a read. Lucky for me I am not a smart person.
"The smart person often finds it harder to be a good decision-maker, because they are so trapped untangling the logic traps all around them. All the issues they can find, that are fixable. They get so stuck fixing all the problems they forget that the main problem of them all is picking which issues to fix."
https://medium.com/@alibhamed/whats-the-point-59a17272774
9. Good perspective on Rolling VC Funds from my buddy Carlos of Diaspora Ventures. Recommended read.
https://carlosdiaz.substack.com/p/how-rolling-funds-work-from-the-inside
10. "As a seed-stage investor, we evaluate frontier tech by:
a) the intellectual property and the expertise the leadership team holds.
b) the technology’s potential impact on the market.
With investing in (a) a bright team with a deep, unique understanding of the domain and some early feeling for the commercial strategy being the by far superior variable.
There is no real way to measure frontier tech traction in the early seed stages. However, we can interpret external trends and market movements as either working in favor of or against a particular frontier tech company."
How Do VCs Measure Traction in Deep Tech? | by Dominik Lambersy | Speedinvest | Aug, 2020
11. "As I’m wrapping up the last 25 years and extracting learnings and insights, I’ve also started to reflect on the next 25 years and how I’d like to spend my most precious resource – time – to live an intentional, mindful and experience-rich life. The learnings are already there from previous generations: be true to yourself and your own dreams, work less, express your feelings, stay in contact with friends, and allow yourself to be happy.
Of course, these are very general regrets, famously delivered by nurse Bronnie Ware through her work with people on their deathbeds. But I think the perspective is valuable, to fast-forward yourself into the future and then look back to reflect on who you want to become, as we are all becoming, either if we want it or not, intentionally or by chance. To move back and forth, from the big picture to the daily practise, and from the future to the present moment is a very valuable skill. It separates what matters from matters less."
https://mailchi.mp/f2451203f6c9/fewer-better-things-no-9364492?e=f5dfcce6c6
12. Great discussion on Venture Portfolio Construction. Must read for all emerging VC fund managers.
“Venture is a really hard game. The unfortunate reality is that the vast majority of funds will fail to achieve venture-like returns and many will fail to outperform even the public markets given the headwinds of a “2 and 20” structure. However, LPs continue to invest in the asset class because it has the potential to produce outsized returns. LPs investing in your fund need to believe your portfolio construction has that potential.”
https://ckthoms.substack.com/p/no-1-understanding-portfolio-construction
13. "Scott is too sly to say it outright, but it was also the presentation of a vision: a tour through the trippy fantasyland he's curated in his mind as one of the more potent culture movers of his generation. His woozy, digitally distorted sound has already shaped an era of hip-hop, but his influence has extended beyond music and into art and fashion.
He exists as a kind of strange unicorn in the culture, someone who's fluent in the language of the youth (mostly young men who spend a lot of money on clothes and want to turn up) but who talks very little about himself. He's regarded as both omnipresent and a bit elusive, on a wavelength that resists a lot of the contemporary notions of celebrity.
Though he shares a daughter, Stormi, with a Kardashian-Jenner, for instance, he's withholding and private and refuses to talk about their relationship. To Scott, mystery is a powerful form of currency. You could say he's almost shy, obscuring his face in photos, the opposite of most modern “influencers”—and yet he's quietly one of the most influential people on the planet."
https://www.gq.com/story/travis-scott-september-2020-cover-profile
14. An old one but it’s so good.
"If you want an average successful life, it doesn’t take much planning. Just stay out of trouble, go to school, and apply for jobs you might like. But if you want something extraordinary, you have two paths:
1. Become the best at one specific thing.
2. Become very good (top 25%) at two or more things.
The first strategy is difficult to the point of near impossibility.
Few people will ever play in the NBA or make a platinum album. I don’t recommend anyone even try.
The second strategy is fairly easy. Everyone has at least a few areas in which they could be in the top 25% with some effort. In my case, I can draw better than most people, but I’m hardly an artist. And I’m not any funnier than the average standup comedian who never makes it big, but I’m funnier than most people. The magic is that few people can draw well and write jokes. It’s the combination of the two that makes what I do so rare. And when you add in my business background, suddenly I had a topic that few cartoonists could hope to understand without living it."
15. If you are as interested in the Gaming space as I am. This is a good overview.
"Gaming no longer solely refers to specific hardware, games or gameplay. Increasingly, the lines between entertainment, e-commerce, social media and gaming are being blurred. New areas within the gaming value chain are rapidly expanding and enabling new tech integration and business models. VCs with limited experience in the space are waking up to the fact that early-stage opportunities now extend beyond developers and publishers."
Mapping The Gaming and Esports VC Landscape | by White Star Capital | Venture Beyond | Jul, 2020
16. This really explains the growth of the BS "Woke" movement & awful Cancel culture in the USA well. A very uniquely American movement I should add.
"If you go through the list, they are exactly what radicals are objecting to now: bigotry, the ignorance of the uneducated, power, corruption, militarism and oppression. It lines up so perfectly with today’s agitation.....What we’re seeing now is an amplification of what I wrote about five years ago: an intense spiritual hunger that has no outlet."
"Cancel culture is just the latest and most virulent form of the religious notion of shunning, in which people are chased into further appreciation of their guiltiness.
At the very least, one of the effects of the shunning is to frighten everyone into silence. Its purpose is to get people fired, to put people beyond the pale, to get them out of our sight. This is for a couple reasons. First, it is to ensure we are not infected by this sinfulness. And second, it is a public declaration of our power. It says, look how powerful we are, that we can do this to people.
The Twittermob is really an astonishing phenomenon."
https://www.spiked-online.com/2020/08/14/wokeness-old-religion-in-new-bottle/
17. Life longevity is before us. Exciting times.
"Past generations used to say that even though we cannot postpone natural death, we can control how we live. They also believed that there is “nothing new under the sun.” Both statements are inaccurate from our current perspective. With advances in bioscience and technology, one can imagine a post-COVID-19 future when most diseases are cured and our life span will increase substantially.
If that happens, how would our goals change, and how would this shape our lives? Given the luxury of pursuing longer-term plans, we could accomplish more ambitious tasks. We could decide to care more about our planetary environment and interpersonal cooperation, since pollution or hostilities carry long-term dangers. An extended life experience could make us wiser and more risk-averse since there is much more at stake. It would make little sense to send young soldiers to wars, or initiate wars in the first place."
18. The great reset for Startupland. And why it’s a good thing in the long run.
https://davidcummings.org/2020/08/22/the-great-reset-for-startupland/
19. Food for thought here. It's been a rough 2020. But we will get thru this.
"I didn’t think of San Francisco as Home at that point, but fast forward to today, unbeknown to me, it is home. This past week, three of my favorite neighbors have moved out. Another close friend has packed up and moved out of San Francisco. Slowly, I am starting to lose people and places that gave life some context. Life is the context friends, and places provide us.
Many of my favorite places are shutting down. Reality has a porous quality to it now. And like the ash falling from the sky, it is sprinkling a sense of loss. I wonder how many others feel this social disruption that is happening around us.
We have a framework of vanishing relationships. These relationships give context to who we are, what we do, and where we live. The coffeeshop we sat down for meetings and conversations are now being replaced by two-dimensional take-it-to-go experiences that lack the dimensionalities of human experience. How can you lend emotional payload to picking a cup of coffee from a barista behind a glass wall and a mask?"
https://om.co/2020/08/21/home-alone/
20. The Telegram revolution in Belarus. I hope it ends peacefully with the people in charge and with Lukashenka OUT.
"So-called “colour revolutions”, in former Soviet states like Armenia and Ukraine, used similar parallel channels to oust autocrats. But something different is happening in Belarus. In lieu of physical leadership, its uprising is channeled almost entirely through a single app. And right now, it looks as if it might just succeed.
If Europe’s last dictator does fall, Franak Viacorka has no doubt where Belarus’ future will be decided. “Telegram seems to be the most organised, most coordinated group in Belarus opposition right now,” he says. “The political parties cannot choose a leader. Tikhanovskaya is afraid to take responsibility. And what will happen next, if the politicians will not choose their temporary government? Telegram groups will choose this for them. I can say for sure that this revolution can be called the Telegram Revolution. Never before in history has one technology decided so much the political fate of a country.”
Startups Founders: Get an Executive Coach!
I’ve recently had numerous conversations with several non-US portfolio companies founders who had raised series A’s (or had big Series Seeds). They were having many personal issues with scaling the team, leadership & growth issues. No surprise that these founders were facing challenges as they now had to deal with a board, growing a staff and management team. A very big difference from the earlier pre-seed stage.
As we talked through these issues, I’d always ask, “don’t you have an executive coach?”
Of course the answer was almost always a resounding “No”. And i’m always surprised but not surprised at the same time.
For most of my top Silicon Valley companies, the minute they finished raising their A, (or even a sizable Seed round) they usually went out and hired an executive coach. In fact, it was usually their lead investor who recommended or pushed them to do so.
In fact, I think it’s become very commonplace here in Silicon Valley or standard now. If you have never run a fast growing organization, or have and want to get better, I think it’s incumbent on you to figure out to get better FAST. Becoming a leader and good manager is just a completely different skill set. It’s okay to get help here as it’s not a skill that you learn in school or something you can pick up from a book. It’s also important for your own mental health.
You need someone who is an outsider who will question your assumptions, to push you and help you see things that are smack dab in front of your face. These coaches should be paid by session/hour in cash, not equity as you do not want them incentivized from your business growth. You want them incentivized for YOUR personal growth. And I can testify I have seen dramatic changes in many founder’s performance and leadership/management ability after getting an executive coach.
Some amazing folks I can recommend are Jerry Colonna & his Reboot team (https://www.reboot.io). Also Steve Schlafman High Output (https://highoutput.co) who is on the east coast (don’t know Steve but he has a good rep). And no, you do not need to be an ex-VC to be a good executive coach (even though both these guys are). I’ve also heard very good things about the platform Valor Performance (https://www.valorperform.com) too.
I think executive coaches for entrepreneurs are a very specific role and like all industries it’s full of unqualified charlatans. So do reference checks here and talk to many different coaches before you pick one. Something I hope you would also be doing when picking a lead investor or lawyer, it’s just as important.
This executive coach trend for startup founders is not that common outside of the tech ecosystem in the USA. But it is coming. And it’s a very good thing.
The “Launchpad” Business Concept: Everyone Should Build One!
“Before thinking of building a Amazon or Apple, you have to think of your business as a 'launchpad' first. That's because even if you have a rocket, you can't go to space without a launchpad.”
What a launchpad business is (from @awilkinson):
- A biz that gives you freedom
- Makes $100-200k a year in personal income to build your bedrock
- Allows you to try new things
- Examples: Consulting, services business, digital business, courses, etc.
(Source: https://twitter.com/ericosiu/status/1277989583871864833?lang=en)
Absolutely right on. I love this concept.
With all the new low code/no code tools, it is very much easier than ever. Add on top of that, all the available online classes/blogs/podcasts about online marketing and copywriting. There is literally nothing stopping a motivated individual to build this kind of business.
For most people in the world, I think this is the better path if you are a founder. Or at least a good first step to your next big thing.
Even if you have a full time job that you love, it is probably a good idea to build a launchpad business on the side. Diverse revenue streams are good in case something happens. If you are like the 80% of people in the world who have a full time job you hate, you ABSOLUTELY need to build one.
Having a strong financial foundation allows you to do whatever you want life-wise. It makes you “UnCancellable.” You can travel the world. You can start a Rolling Venture Capital Fund or Angel Invest on the side. You can even go on to build another business that could be a VC-swing for the fences type of business. Basically a “Launchpad” business gives you a lot of options.
If i was a young 20-something, this is exactly what i would do. Heck, I need to go build a launchpad business for myself right now.
The Slow & Steady Unbundling (aka Democratization) of Venture Capital: From Syndicates to Angellist Spearhead, Operator-Angel Funds, Rolling Venture Capital Funds & Solo Capitalists
“Investing is a sell-side product” (Phin) Barnes (of First Round Capital). “Capital is a commodity, especially in this market. What you’re saying with a term sheet is that you think the founder’s equity is worth more than your dollars.” That means investors have to close the value gap with sweat.”
Venture Capital has been awash with money in the last half decade. We’ve seen the rise of huge multi-stage Venture Capital funds in the Growth and Later stage side of Technology investing. These range from $400 Million dollar funds to $4-5 Billion dollar funds. And I have to mention the monstrosity of the $100B Softbank Vision Fund.
That’s one side of the “Barbell effect.” On the other side of the barbell, we’ve seen the rise of several hundred (estimated 800+) new Pre-seed and Seed stage Fund managers & investors. But if you look much deeper into the early stage, there are super interesting undercurrents emerging that underpin much of this.
I’m going to highlight what are some of the more interesting developments in the last half decade.
Angellist as Platform: basically Amazon Web Services for Angels and VCs:
“Shopify exists to basically arm the rebels. We want a lot of people to go out and compete against Amazon.” --Tobi Lütke, founder and CEO, Shopify
Similar to Shopify’s call, Angellist is doing the same thing for early stage venture capital. This is a continuation of the “bottoms up” unbundling of traditional Venture Capital Funds.
Angellist first did this with building the backend infrastructure. This enabled top angel investors to raise money from high networth individuals in “single deal VC funds” to invest in a specific startup ie. Syndicates. We saw folks like Zach Coelius, Gil Penchina of Flight.vc and Jason Calacanis really supercharge their investing activity through this.
Then Angellist started the Spearhead program in 2018 “with a mandate to identify promising startup founders and give them cash to invest in startups autonomously…..the program identifies promising startup founders and provides them with $200,000 of investable capital, and potentially $1 million. It also sets them up with the right legal entities to invest.”
Angellist is a big enabler of the bottoms up explosion of new investors. And the logical next development is that of the Operator Angel Funds.
Operator Angel Funds:
Fact is most founders would prefer to take $$ from other founders or people who have good relevant operator experience.
These operators are also just closer to the market. They are able to see things that are working much faster. This is particularly on the B2B side. They’ve had to use & implement things like Stripe ,Twilio or whatever product before anyone else for their own business. They end up with deeper and more insights than VCs who are far removed from this.
Many folks running the Operator Angel Funds are CEOs or execs running significant businesses as their full time job. But the biggest advantage of their roles? They see and meet lots of startup founders and companies. This results in incredible access and deal flow.
When Ryan Hoover first started his Weekend Fund in 2017, it just made sense. He is the guy who started Producthunt and has first look at the cutting edge of startups. Why not help and invest in some of these up and coming founders while doing so. Additionally because he has a full time gig already, he doesn’t need to live off management fees. So having a small fund on the side is a great side hustle and very complementary to his day job.
From a founder’s perspective, there are many good reasons to take money from these operator investors. I agree that in many cases, they are replacing the “Friends, Family and Fools” round for some of the best founders out there.
Brianne Kimmel states that they do this “ to de-risk technical dependencies, accelerate time to launch and build momentum for the next round.”
Some other great examples besides Ryan Hoover’s Weekend Fund that come to mind are the Todd & Rahul Fund, Sri Krishnan’s Kearny Jackson are representative of Part-time initiatives.
Jeff Morris Jr’s Chapter One & Brianne Kimmel’s Work Life Ventures are representatives of the full time funds here.
Rolling Funds:
The other more recent development is the “Rolling VC Funds” concept introduced by Angellist. Exemplifying the previous trend with superstar founder Sahil Lavingia or superstar investor Cindy Bi (shout out to my friends at www.diaspora.vc too). It’s probably one of the most recently talked about developments in VC.
Starting a traditional VC fund is not just hard but also just plain expensive from a legal perspective. This is on top of the brutal fundraising process of raising the money from LPs. This has been a major barrier to entry for folks who aren’t rich to begin with or who are not Silicon Valley insiders.
Rolling Funds are basically a subscription service for LPs wanting to invest on a quarterly basis in the next generation of Operator Investors. It’s also a great way to involve Operator LPs, people who are now financially aligned with you, can help you with deal flow and build out your network further. Many people in Silicon Valley are both curious and excited about this.
The implication of rolling funds is that it is an open ended fund. With this platform and ability to market with 506c (ie. Solicit), talented individuals from different geographies or backgrounds can now potentially become new VCs. We can potentially expect a flowering of new, diverse investors (culturally & geographically). They will bring much needed new perspectives in investing, focusing on new overlooked sectors, founders or business models.
For all those interested in more detail on what this Rolling Fund thing is, here is an overview: Rolling Fund FAQ: What Is A Rolling Fund?
And of course as this is a new thing, there are some questions and concerns.
This write up covers it well here.
https://medium.com/@alibhamed/some-thoughts-on-rolling-funds-c56513c4ec84
I’m a believer that competition is a good thing for the market. But in many ways, they will also be great co-investors, even upstream investors for institutional VCs versus being direct competitors in my view.
In fact, I view these developments as a good springboard or training wheels for emerging VCs. If they do well, they can choose to continue with rolling funds or Syndicates. Or they “graduate” (i use this term loosely) to doing a traditional Venture Capital Fund similar to what my friend Zach Coelius has done (he is an awesome investor & good dude btw). And as their reputation and networks further expand, maybe they end up going the Solo Capitalist route.
Solo Capitalists:
I’m fascinated by the phenomenon of the Solo Capitalist here in Silicon Valley. It’s like the “Passion Economy” has come to VC. And I see this as the ultimate evolution of Operator Investor Funds but supersized by their brand name, good reputation with founders, audience and network that they’ve established over a decade plus in Silicon Valley.
Names like Elad Gil, Oren Zeev, Lachy Groom, Shana Fisher, Ray Tonsing and Josh Buckley. All of them folks who were either very accomplished founders or investors before they started doing this. Nikhil Trivedi highlights this well.
“over the last couple of years, there's been an increase in individuals investing not just at the earliest stages of companies, but at the Series A and beyond.
These individuals aren't just investing their own capital. They’re raising dedicated funds and special purpose vehicles (SPVs) from traditional limited partners (LPs).
And they aren't just participating in financings alongside venture firms. These individuals are often competing against venture firms for the right to lead rounds, and signing term sheets before the companies get to pitch the traditional venture partnerships. Most importantly, founders are choosing to work with them, in some cases in lieu of partnering with firms.”
In some ways this shows the unbundling trend of traditional and commoditized Venture Capital funds. Nikhil continues:
“The importance of an individual's brand has been steadily increasing in venture capital for quite some time. Founders are more often than not picking an individual partner who they want to work in a financing round, based on the relationship built with them, and based on their brand and expertise, instead of the firm's.
So it's a logical next step that the firm is the individual, and the brand is the individual, which is the case with the solo capitalists.”
Summing Up:
I am personally very excited by all of these developments. If you are a startup founder or investor you should be too! This brings more diversity into the investing ecosystem and are new funding sources. Great news for founders and the tech ecosystem overall. I can’t wait to see these developments happen outside of Silicon Valley as well.
As an infamous & monstrous historical giant once said, “Let a thousand flowers bloom, let a hundred schools of thought contend.”
Marvin’s Best Weekly Reads August 16th, 2020
“In a country well governed, poverty is something to be ashamed of. In a country badly governed, wealth is something to be ashamed of.”--Confucius
1. Rolling Funds. Will be watching this closely. Very interesting development in VC.
https://twitter.com/shl/status/1291760138571849728
2. Implications of increasing remote work in the long run are Wages will go down. Just Supply and demand.
"With sufficiently advanced remote work capabilities, each worker in a large region could compete for any job in that region, without having to move their home. So whole big regions, continents or even the whole planet could function like single huge cities, with matching levels of work specialization, at least for tasks that can be done remotely. As a result, tasks that workers do remotely in such regions could become very specialized, in part via larger more complicated firms and work task coordination. Many small fragmented labor markets would merge into a few large integrated labor markets.
Of course, we are a long way away from this situation now, and the path to get there is harder than futurists anticipated decades ago. But this pandemic has given us a big push, and in thirty years I think we will have gone far enough that at least one quarter of human work will be done remotely."
3. I know it looks bad now but people ignore the rejuvenative power of the USA. But yes, it's pretty bad now in America and will continue to be for the near future.
"COVID-19 didn’t lay America low; it simply revealed what had long been forsaken. As the crisis unfolded, with another American dying every minute of every day, a country that once turned out fighter planes by the hour could not manage to produce the paper masks or cotton swabs essential for tracking the disease. The nation that defeated smallpox and polio, and led the world for generations in medical innovation and discovery, was reduced to a laughing stock as a buffoon of a president advocated the use of household disinfectants as a treatment for a disease that intellectually he could not begin to understand."
4. I was actually in the middle of a write up on this same podcast episode. But David Cummings does a far better job summarizing it than me. The 3 generations of SaaS.
5. Professor Galloway is the best. He is angry, he is funny, insightful and prescient at the same time.
"In 2020, the mantle of “business guru for people who aren’t interested in business” arguably belongs to Scott Galloway, a professor of marketing at New York University’s Stern School Of Business, tech startup veteran, brand consultant and bestselling author. A graduate of UCLA and UC Berkeley HAAS School Of Business, Galloway has been at the forefront of the digital economy since its earliest days."
Meet Professor Scott Galloway: the tech guru who terrifies Silicon Valley
6. "When I see goals, and talk to entrepreneurs about their goals, I try to tease apart if the goal is within his or her control. If it isn’t, I work at helping reshape the goal to something that is more controllable, and share the idea about systems.
Control what you can control.
Start thinking in systems."
Start Thinking in Systems, Stop Thinking in Goals – David Cummings on Startups
7. "The automation industry will see a steeper growth than previously anticipated and this pandemic is possibly the largest boost to the mainstream adoption of a new system of employment.
Why? Because this crisis has revealed many things that aren't working properly (anymore) and by paying attention to these inefficiencies you can innovate to overcome and profit from them. The simplest and surest way to create wealth in the coming decade will be the ability to see things others don't and bring creative solutions to the table that add value & fix what isn't working properly. All those times your manager told you the job could not be done remotely, all those university courses that couldn't be taught online, and every time the government had no budget for X, all lies. This crisis has exposed things that were already common sense to many."
COVID19's influence on business & innovation in the near future.
8. This thread is really interesting. "Hedging in 2020."
https://twitter.com/vgr/status/1292869575059451905
9. This makes me mad. The incompetence and corruption. Don't read this if u don't want to get angry. It's appalling how PPE and Gov't grifters are. #BIFD
The Grifters, Chapter 2 - N95 Masks
10. This is really good stuff for startup founders trying to raise $$ in the new Zoom environment.
How VCs Judge Your Startup (on Zoom): 15+ Tactics Behind Successful Fundraises
11. I’m actually a big fan of Angellist’s Rolling VC Funds. Great move to democratize VC Startup investing. But there are considerations. Nothing is perfect. Biggest concern would be below. But overall I am positive on this development.
“These rolling funds can be great solutions for individual investors who can’t hit normal fund minimums. On top of that, it seems like the way they are being set up allows for general solicitation, which is a way more open and transparent process for providing fund returns.”
“Trying to deploy X/time period is really hard. Accelerators do it, and I’ve never understood how. I’ve written about this before, but for me — deals often come in waves. Some quarters we do 3–5, others we do none.”
https://medium.com/@alibhamed/some-thoughts-on-rolling-funds-c56513c4ec84
12."The Lebanese are too fixated on corruption. It is bad, it causes a loss of social trust, it brings unfairness. But corruption does not necessarily slow down economic activity — red tape and patronage do. Just consider how many places thrived (Rome, Renaissance Italy, the Industrial Revolution, etc.) in the presence of a high level of corruption. Furthermore, localism tends to reduce corruption."
"So the worst thing you can do to a country is give it oil or some valuable resource, and not just because of the so-called Dutch disease (resources wreck the rest of the economy)...Similarly, today, Singapore and Hong Kong are the most successful economies, while devoid of resources — Singapore needs to import water. The same applies to similar historical successes: the Dutch Republic, Venice, Genoa, Carthage. Consider the postwar bounces by Germany, Japan, Soviet Russia, etc."
Lebanon: from Ponzi to Antifragility | by Nassim Nicholas Taleb | Jul, 2020
13. "As far as I can see, cancel culture is mercy’s antithesis. Political correctness has grown to become the unhappiest religion in the world. Its once honourable attempt to reimagine our society in a more equitable way now embodies all the worst aspects that religion has to offer (and none of the beauty) — moral certainty and self-righteousness shorn even of the capacity for redemption. It has become quite literally, bad religion run amuck.
Cancel culture’s refusal to engage with uncomfortable ideas has an asphyxiating effect on the creative soul of a society. Compassion is the primary experience — the heart event — out of which emerges the genius and generosity of the imagination. Creativity is an act of love that can knock up against our most foundational beliefs, and in doing so brings forth fresh ways of seeing the world. This is both the function and glory of art and ideas. A force that finds its meaning in the cancellation of these difficult ideas hampers the creative spirit of a society and strikes at the complex and diverse nature of its culture."
Nick Cave - The Red Hand Files - Issue #109 - What is mercy for you?
14. "Apps and themes are Shopify's fastest growing revenue segment today, contributing 14% of Shopify’s total revenue, and many of these apps are growing faster than the Shopify platform itself. This segment works similar to Apple’s App Store or Salesforce’s AppExchange, where the platform (Shopify) has a 20% take rate on all software through the app store and the developer gets 80%. Today, Shopify has over 4,600 apps and 30K+ agencies and web designers serving merchants in its ecosystem.
Certain standout products like Attentive and Klaviyo were among the earliest and fastest moving third party apps. Both companies leveraged the Shopify ecosystem as a unique distribution channel to help grow their businesses quickly beyond the $100M revenue threshold. Today, there are many more fast-growing apps following this trajectory. For all its success as an open ecosystem, it seems these businesses that comprise the Shopify ecosystem are rarely discussed in the venture world—so let’s dig into why this is the case and why more VCs should be spending time looking at companies growing on Shopify. "
https://base10.substack.com/p/faster-than-fast-smb-retailers-move
15. Good advice. It’s gonna get ugly.
"So what can you do moving forward?
First, this has been an incredible learning opportunity for many people. You must do the hard, disciplined things during the good times, so that you can drastically reduce the likelihood of economic ruin in bad times. Spend less than you make. Invest your capital intelligently. Let compound interest work for you. Hold assets that protect you against inflation. These timeless personal finance rules are as true today as they have ever been.
Second, you can prepare yourself for what is likely to transpire over the coming months and years. There have been trillions of dollars printed, with more probably on the way, so it is a common belief that inflation will naturally rise. As this happens, those caught holding cash will get their purchasing power destroyed, while those holding real assets will see their wealth artificially inflated. Building wealth is a game and that game has rules. You have to understand these rules in order to successfully play the game."
https://pomp.substack.com/p/a-recap-of-the-pandemic-related-economic
16. "What happens when 6 months of effort meets 6 months of laziness? A wide separation in skills.The picture is not pretty for people who sat on their hands.
While average people focus on the inability to go out and “rage with their friends”… You can’t really change the laws. So instead of complaining about the laws it’s time to take action and focus on the positives. You now have time to read, write, work on a project you’ve been neglecting, eat healthier, kick out bad habits and improve all intangible skills that were unimportant pre-pandemic. If none of these items apply to someone, what they are really saying is they don’t want to improve their lives.
So think about it simplistically, if you try to look at the positive of any situation, you will naturally move in the correct direction. If we remain locked down, you can focus on reading, fitness, copywriting and other indoor activities that are productive. If the world partially opens up a little and say restaurants are “good to go” then you can say “great, i can now skip out on cooking X days out of the week and free up time for project Y”. The key is to look at the positive productive angle based on the environment. Productivity will drive your long-term individual value to society."
https://wallstreetplayboys.com/people-suffer-from-a-lack-of-prioritization/
17. "Modern semiconductor manufacturing is at least as important to the economy as oil was in the 1970s — at least in the case of oil, it was available all over the world albeit at higher prices than in the Middle East. If the overwhelming majority of leading edge semiconductor manufacturing is concentrated in Taiwan with the rest in South Korea, then the geopolitical implications are significant as there is no cost curve with leading edge semiconductor manufacturing — either you can do it or you cannot.
It would be as if the Middle East was the only place in the world with oil rather than simply the region with the lowest costs. And it is strange that that the Chairman, CEO and CFO of Intel have zero technical expertise in semiconductor design or manufacturing at arguably the most critical time in the history of Intel."
Investing Mistakes, Chapter 1001. Investing is a difficult, humbling… | by Gavin Baker | Aug, 2020
18. The always perceptive Mr. Danco. I love his keen observations.
"In that sense, and here’s the twist conclusion – these rolling funds reinforce the social contract, if anything. They’re a way to successfully extend the social subsidy of angel investing into individual trendy managers, increasing the total number of brand-name startups that any individual can get social exposure to, without costing anything along the way except for carry.
Remember, the social returns to angel investing (and now, rolling fund investing) don’t respond to dilution the same way that financial returns do: follow-on investments don’t dilute your stake, they augment your cred. So unlike with “real” venture capital, where it’s not about your number or % of winners (it’s all about your percentage of dollars in the winners), here it just strictly becomes “how do I get into a many companies as possible, even if it’s a tiny amount that’ll get diluted into insignificance?”
Rolling funds: maybe not so aligned with actual return on investment, but totally aligned on what really counts – empowering the maximum number of people to get to say they’re an investor in whoever next year’s version of Roam is. Or better yet, getting to say something like “Oh, I’m in Roam, I got in as an LP” or something eye-rolling like that. Just wait, people will start saying this."
Rollin' (ARR-paid vehicle) – alexdanco.com
19. This is a very good idea. Hallway Values test. Most companies would fail this.
https://davidcummings.org/2020/08/15/the-hallway-zoombomb-values-test/
20. This is really useful.
"In order to better understand how a business is running (i.e. diagnostic metrics) and then help it improve (i.e. operating metrics), you need to thin slice the ARR into its fundamental components.
Those fundamental components are:
New ARR: additional ARR from newly signed customers
Churned ARR: lost ARR from customers who have churned
Upsell/Expansion ARR: additional ARR from customers who are paying more than they did before
Downsell/Contraction: lost ARR from customers who are paying less than they did before"
https://alexoppenheimer.substack.com/p/thin-slicing-arr
21. This makes me sad. I love New York City. I hope he is wrong but this is a very strong bear case against recovery.
The Importance of “Fallow Time” aka Sabbaticals and Extended Breaks
I took my first major break in early 2012 after a 10 and half year stint at Yahoo! I was exhausted & needed to rest & recover. (As a data point, I was doing 180,000-200,000 miles of travel a year at least).
I was also lucky to be pretty flush at that time, as I had saved some $$ from my quarterly bonuses, RSUs and stock options. So I did not have to work for a few years. (Although looking back, I grossly mis-managed all this after. But story for another day).
I spent a lot of time with my 2 year old daughter at that time and read a lot (50+ books). I took the family to Asia for the summer and traveled through Japan and Taiwan. I also spent time in Europe traveling by myself. I attended close to 54 conferences in media, tech, startups, investing and even random things like programming, architecture and whatever struck my interest in 2012. I even got to do exotic grand tour by visiting Georgia (the country), Iran and Belarus, & Azerbaijan as well as revisiting Russia, Ukraine, Japan and the Baltic states of Lithuania, Latvia and Estonia.
Additionally, in my ongoing quest to become the Asian “Jason Bourne”, I took classes (thank you Groupon and Livingsocial) to rewire my brain. Classes ranged from wilderness survival, cooking, copywriting, bartending, archery, shooting, sailing, Russian language studies etc. It was good if not expensive fun. Also a great topic for cocktail party conversations. :)
I vividly remember heading down to Los Angeles for an Agriculture conference in the latter part of 2012. I met up with a couple of old friends of mine for an amazing dinner. As I was recounting what I was doing that year, my friend said, “oh, you are doing a fallow year.”
She was spot on and I've used this term since then. In farming, fallow land is left to rest and regenerate. A fallow field is taken out of crop rotation for a specific period of time. There is a lesson here for all people in business or whatever creative field you are in.
I never understood friends who jumped right into a new job or role the next day or week without taking some break. Breaks like this are important to rest and reflect on your experience. It helps you make sense of what happened and you can draw out valuable lessons for your life and work. It is also a critical step to help you to prepare for your next big work adventure, whatever it is.
Looking back, I can honestly say that the 2 year break I took was one of the best things I've done personally and professionally. It’s key to long term performance. This is also why I am taking another “Fallow year” in 2020. “Resting ethic” is just as important as “Work Ethic.”
Superman (or Superwoman) Syndrome:
I remember this scene in the old movie “Addicted to Love” starring Meg Ryan and Matthew Broderick. The French antagonist talks about being a nobody in France. Everyone there has a good salad & sauce and are considered good chefs. But in America, because most folks aren’t great chefs, he is different and special. He is Superman.
What does this have to do with tech or Silicon Valley? Everything.
It’s really funny when founders or investors in the San Francisco Bay Area travel to another region or country (Canada, Europe, Asia). We get the halo effect of being from Silicon Valley. We are seen as experts just because we are from here. But the reality is we probably don’t know that much more than you do. Or it could just be that we are the one eyed person in the kingdom of the blind. We are seen as insiders to Silicon Valley.
BUT in my view, you are not a true Silicon Valley insider unless
You sold your company for $100M+
Took it public (The ASX or TSX does not count, sorry),
Have invested in some $ Billion USD + startups
Part of the Paypal mafia (or “AirbnB”, “Square,” “Stripe”, “Insert Great startup name here” mafia)
Founded a real Venture Capital (VC) fund or a General Partner at a top tier VC fund
This is probably .001% of the people in Silicon Valley.
I can legitimately say, most of us are NOT insiders and should openly claim that. (I certainly am not nor do I feel like one either). Anyone who brags about being an Insider or expert is probably not. They are posers! (ahem, Plug & Play & way too many individuals to name).
The way you should judge someone is by what they do. Are they helpful? Do they give good advice that makes sense? Have they worked at any place credible or done anything interesting or relevant?
Actually you should use this to evaluate anyone who tries to give you startup advice. Or gives advice in general.
Also use the network. Do reference checks and ask around. You will find out quickly who is really a player or legit by doing this. Trust me here. If u do this, you will find out that 80% of the people from here are frauds.
Founders, word to the wise.
Marvin’s Best Weekly Reads August 9th, 2020
Hanlon’s Razor: "Never attribute to malice that which is adequately explained by stupidity"
1. "The Covid-19 pandemic crushed vast swaths of the economy, slashing consumer demand, closing businesses, and vaporizing millions of jobs. But it’s been good to the nascent sliver of the digital economy that helps people channel their existing skills into sellable services and products.
Such products range from ebooks and meal plan templates to online classes, podcasts, membership clubs, newsletters, and porn. They proliferate on platforms including Patreon, Twitch, Substack, Etsy, Teachable, Knowable, Podia, Thinkific, Supercast, Lulu, Smashwords, Outschool, OnlyFans, and Gumroad.
These platforms generally take a cut of each sale made, ranging from 5% to 50%, or charge a recurring fee to sellers for accessing their market. Tech investors have dubbed this the “passion economy,” a place where anyone can profit doing what she loves. But because that term risks both exaggerating the payoffs of this work and obscuring its ties to the gig economy, the last great labor “disruption,” we might better call it the “hustle economy:” an online labor market in which platform-dependent workers create and monetize their own digital products.”
The Gig Economy Is Failing. Say Hello to the Hustle Economy.
2. "She meant, only focus on large margin investments and turn inventory quickly. It’s also using sales and profits to prepare valuations, to further increase capital or funding.
The mantra "think in multiples" has become a consistent reminder to me as an entrepreneur as to how to approach business and financial decisions. It’s what those entrepreneurs who earn 300% of their invested dollars understand. This approach will change the way you address business planning, but it takes some understanding of the mentality in order to make it work for you."
https://wlth.ca/blog/why-entrepreneurs-think-in-multiples/
3. “Amazon is about a seven-year view,” he says. “Most public companies, it’s a one- to two-year view. And, as it turns out, they’re very risk-averse. Jeff and Amazon are willing to make a long-term bet and are very willing to be misunderstood for a long time while they’re building toward that.”
The former analyst speaks from firsthand knowledge of the short-term mind frame on Wall Street — a mind frame he rejected in the creation of Business Insider.
Now 13 years old, Business Insider — which, like Amazon, had a plethora of doubters along the way — was still in its relative infancy when Bezos came on board. But in 2015, the startup was sold to Axel Springer, one of Germany’s biggest media companies, which was keen to build a digital media presence in the U.S. With that backing, and Blodget at its helm, Business Insider has ramped up to be one of the most vibrant — and popular — media companies in the world: By December 2018, it had more than 98 million monthly unique visitors in the U.S., ranking second behind CNN in the Comscore general-news category, according to Business Insider. That year, Business Insider hit $100 million in annual revenues and turned a profit, Axel Springer reported."
Henry Blodget Was Banned From the Financial Industry. So He Built a Financial Media Empire.
4. "Despite ample warning, the U.S. squandered every possible opportunity to control the coronavirus. And despite its considerable advantages—immense resources, biomedical might, scientific expertise—it floundered. While countries as different as South Korea, Thailand, Iceland, Slovakia, and Australia acted decisively to bend the curve of infections downward, the U.S. achieved merely a plateau in the spring, which changed to an appalling upward slope in the summer. “The U.S. fundamentally failed in ways that were worse than I ever could have imagined,” Julia Marcus, an infectious-disease epidemiologist at Harvard Medical School, told me."
"But the COVID‑19 debacle has also touched—and implicated—nearly every other facet of American society: its shortsighted leadership, its disregard for expertise, its racial inequities, its social-media culture, and its fealty to a dangerous strain of individualism."
5. Space Force!
"But for all the ways that civilians and the military rely on it, America’s network of roughly 1,000 satellites is virtually unprotected. And just as lightly defended access to deep-water ports or natural resources was a source of war in the past, leaders and strategists worry that America’s vulnerable satellite network is an invitation to conflict in our times. Raymond tells TIME that Russia executed a previous, unreported projectile launch in February 2017. China has started training specialized units with weapons that can blast apart objects in orbit. Both countries have deployed ground-based laser and communications–jamming equipment that can disable satellites.
In short, an arms race for space has begun. This is the story of America’s effort to keep ahead."
"The mission of protecting America’s vulnerable orbital networks falls to U.S. Space Command and Space Force, which since December has the same status as the Army, Navy, Air Force and Marines."
https://time.com/5869987/spaceforce/
6. This is spot on.The Future of Silicon Valley Tweetstorm. Agree that it’s a good thing that the capital and expertise gets exported from Silicon Valley to the rest of the world.
https://twitter.com/KyleTibbitts/status/1290449927861149696
7. This is a really deep take on the media world and its effect on us.
"IN THE 19TH AND 20TH CENTURIES, innovations like the telegraph, time zones, radio, and television led to new patterns of mass connectivity and synchronization. Time was made visual and divided into smaller and smaller units that allowed us to achieve unprecedented levels of coordination. But in our own century, digital media is fracturing our collective experience of clock time."
"In the digital age, everything from the evening news to the 9 – 5 workday has been freed from the cage of industrial era timekeeping. As long as you have an internet connection, you can march to the beat of your own second hand.
This shift has been disorienting for the people who lived through it."
"As a rule, twentieth century time was imposed on people from the top-down. Twenty-first century time is a bottom-up choose your own adventure story that allows people to make their own time machines and live anywhen."
The garden of forking memes: how digital media distorts our sense of time – AZL
8. ”It wasn’t just that the U.S. had strong incumbents, or that the Chinese tech companies were still in their infancy. My default hypothesis was that what I call the veil of cultural ignorance was too impenetrable a barrier. That companies from non-WEIRDcountries (Joseph Henrich shorthand for Western, Educated, Industrialized, Rich, and Democratic) would struggle to ship into WEIRD cultures. I was even skeptical of the reverse, of U.S. companies competing in China or India. The further the cultural distance between two countries, the more challenging it would be for companies in one to compete in the other. The path towards overcoming that seemed to lie in hiring a local leadership team, or sending someone over from the U.S. who understood the culture of that country inside-out.
For the most part, that has held true. China has struggled, for the most part, to make real inroads in the U.S. WeChat tried to make inroads in the U.S. but only really managed to capture Chinese-Americans who used the app to communicate with friends, family, and business colleagues in China.
In the other direction, the U.S. hasn’t made a huge dent in China. Obviously, the Great Firewall played a huge role in keeping a lot of U.S. companies out of the Chinese market, but in the few cases where a U.S. company got a crack at the Chinese market, like Uber China, the results were mixed.”
“How did an app designed by two guys in Shanghai managed to run circles around U.S. video apps from YouTube to Facebook to Instagram to Snapchat, becoming the most fertile source for meme origination, mutation, and dissemination in a culture so different from the one in which it was built?”
TikTok and the Sorting Hat — Remains of the Day
9. “While this go-to-market strategy dates back to the early days of software, it is becoming the predominant method of going to market in many verticals, even in categories in which conventional wisdom might say it would never work. Think GitHub, Zoom, Qualtrics, Slack, Atlassian, PagerDuty, Yubico, Stripe, Plaid – all of these started with a product-led, bottom-up motion, followed later with top-down sales.
Growth+sales changes nearly everything about building an enterprise startup. It changes the way startups build products and the teams behind them, and how they structure sales and marketing. It changes how we as investors evaluate companies, particularly in the early rounds. And it changes how new companies compete with incumbent vendors, most of which are on their heels trying to figure out how to respond.
The most exciting consequence of this shift is that in nearly every category of enterprise technology, it puts the advantage squarely with the startups. When the initial route to market is focused on how much a product sells itself, the winners are the product visionaries, not veteran sales leaders pushing outdated software.”
Growth+Sales: The New Era of Enterprise Go-to-Market
10. These guys are prescient. Pay attention. Below is a snapshot.
"you’re going to see a lot of pain and suffering for people in their 20s. They will be forced to live at home due to the current circumstances. This is going to stunt the growth of many young men so you can expect that in 2030 or so, a lot of the 30 year olds will have the mindset/thinking patterns of a person in his mid 20s.
From an investing perspective you only need to know that the money supply is going to go up. That means you’re simply going to own bitcoin/other crypto you believe in, gold and tech stocks. That has been the trade for quite some time. If you force us to choose we’re going to say the same thing we said when it hit $4,800, likely the best performing “asset” for the next 2-3 years will be bitcoin/crypto in general."
Crystal Clear Structural Changes After COVID
11. More on the Headspin mess.
"it also reveals rot in the Silicon Valley ecosystem that is far worse than this one company. It also shows that some folks know how to exploit Silicon Valley’s one real Achilles heel — Fear of missing out or FOMO. Here what we have is a scenario that occurs all too often.
The FOMO leads to looser diligence and bending of rationality. More often than not, the deal gets done by capitalizing on the vanity of the founders. These days Silicon Valley has been afflicted by lunacy, affectionately named after a fictitious being, unicorn. A unicorn in Silicon Valley parlance is a company valued at over a billion dollars. No matter how rational, smart, or intelligent, every founder wants to be the head of a unicorn. Never mind that unicorns are mythical and non-existent in real life."
12. Very interesting.
"Hobson notes that the man/meat link isn’t rooted in biological need. “There is a propensity for men to be drawn to meaty food,” he notes. “But that’s not because their bodies are craving it. It’s cultural.”
Men and women do require different nutrients, says Hobson, but they’re not necessarily the ones you’d think. “Women need about twice as much iron in their diet as men, because they lose blood every month,” he says. “For men, zinc is a much greater nutrient of need. It’s much more closely linked to reproductive health.” Iron is found in greatest quantities in liver, meat, pulses and dark-green vegetables. You’ll find the most zinc in shellfish, followed by meat, dairy and bread. But no one thinks of liver as female and mussels as male."
We Need to Get Over the Idea of "Man Food"
13. "It’s overwhelming to try to fathom the pain, despair, and loneliness tens of millions of households are struggling with right now. And we didn’t need to be here. America is about generosity, grit, innovation, and a willingness to sacrifice for one another and future generations. There’s nothing wrong with America that can’t be fixed with what’s right with America. However, at this moment, our nation has never been less American."
https://www.profgalloway.com/the-great-distancing
14. “Market and human psychology show that LPs are more comfortable with battle-tested managers in times of uncertainty.
The gross majority of funds that have raised year-to-date have established brand names, market positions, LP bases, maturing track records, and in many cases realized returns, as well as critical experience in weathering downturns. Crisis or no crisis, these are all signals that LPs value. In an uncertain market like the one we face today; these attributes can be even more attractive.”
What you need to know about fundraising this year
15. “The notion of the “organization man”—a term popularized by William H. Whyte’s seminal 1956 book that describes the subsuming of individual agency in service of a large corporation—is giving way to the rise of “micro-entrepreneurs,” or free agents, creators, freelancers, and independent workers who utilize digital platforms to make a living by leveraging skills and knowledge in the absence of a traditional employer-employee relationship.
Accelerated by digital platforms that help surface job opportunities, facilitate customer connections, and aid in setting up and operating a business, workers are empowered to go independent and to earn a livelihood outside the confines of a traditional company.
This trend spans the gamut from individuals who convert their passions into professions—think of YouTubers, podcasters, and gaming livestreamers who’ve monetized digitally-native hobbies—as well as those whom we don’t traditionally think of as “creators,” but who are also similarly shifting to digitally-mediated self-employment, including teachers, salespeople, farmers, chefs, and personal shoppers.
Unbundling Work from Employment
16. The West should be very worried.
"Xi has said that he wants China, by year’s end, to be competitive with the world’s AI leaders, a benchmark the country has arguably already reached. And he wants China to achieve AI supremacy by 2030.
Xi’s pronouncements on AI have a sinister edge. Artificial intelligence has applications in nearly every human domain, from the instant translation of spoken language to early viral-outbreak detection. But Xi also wants to use AI’s awesome analytical powers to push China to the cutting edge of surveillance. He wants to build an all-seeing digital system of social control, patrolled by precog algorithms that identify potential dissenters in real time."
"The emergence of an AI-powered authoritarian bloc led by China could warp the geopolitics of this century. It could prevent billions of people, across large swaths of the globe, from ever securing any measure of political freedom. And whatever the pretensions of American policy makers, only China’s citizens can stop it."
China's Artificial Intelligence Surveillance State Goes Global
17. "You don’t need to figure out if it’s possible to scale it yet. Focus on product love.
What you might see here is that this is essentially the same question that Rahul is after in the Superhuman story — he’s segmenting and drilling down his user base to find that specific group of people who really need and love Superhuman and would be disappointed if they could no longer use it.
The difference is, as a “stage 0” founder, you’re starting from scratch to find your very first version of a product that might attract enough users to begin measuring."
A Method to Find “Product Market Fit” Before You Have A Product
18. Please support my friends in Beirut. The Lebanese people are amazing. Let's help them where we can.
Beirut explosion: how you can help victims in Lebanon
19. "Want to identify the sources of content that you should consume? Ask yourself two questions — is this person writing an unbiased piece that contains facts and commentary from an array of experts? If yes, then that is a good source. If no, then ask yourself, “Does this person have skin in the game for what they are saying?” If yes, then that is a good source.
Unfortunately, if you answer no to both of those questions, you will be better off moving on. Remember, you focus on your food diet. What you put in your body ends up determining how physically healthy you are. Your content diet is not much different. What you put into your head ends up determining how mentally healthy and financially wealthy you are. Proceed accordingly."
20. This is what Venture Capital is about. Taking the big swings. If you are investing with a mindset of limiting downside, you probably should not be in VC.
"more focus on limiting the downside can be inverted as more focus on limiting the upside. The highest alphas in venture don’t come from limiting the downside, they come from the positive outliers — the power law of distributions.
In a recent venture deck I saw a famous Warren Buffet quote as the only content on a slide:
Rule #1: Never lose money.
Rule #2: Never forget Rule #1.
Seeing this was an immediate turn off. It’s much more interesting, and intellectually stimulating, to attempt something with a 1 in 50 chance of succeeding as opposed to something with a 9 in 10 chance of succeeding, assuming the upside is correspondingly larger. Yes, we want to control our own destiny, but we also want to take big risks that have the opportunity for big impact."
Ask Investors How They Think About Zeroes
21. Plenty to learn from the giants of the Chinese consumer internet market. This is a long write up on Pingduoduo. Extremely insightful.
"Pinduoduo’s rise has been nothing short of impressive. It represents a case study of an excellent team quickly building and scaling a transformational business. Like Amazon used books, PDD used fruit as a wedge to build what became one of the world’s largest ecommerce companies in five years. It went a step further than Tencent building games, or Facebook selling ads, and created an asset-light vertically integrated social gaming company. It built farmers, and eventually manufacturers, a business-in-a-box solution for operating their companies. And it entertained consumers while giving them low prices on products they buy everyday.